Constructive Dialogues on Dams and Developments in Nepal

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CONSTRUCTIVE DIALOGUE ON ams and D evelopment IN NEPAL EDITORS Ajaya Dixit n Pradeep Adhikari n Shiva Bisangkhe CONTRIBUTORS Pradeep Adhikari, Shiv Kumar Basnet, Vinay Bhandari, Shiva Bisangkhe, Deepen B. Bista, Ajaya Dixit, Sudesh K. Malla, Dina Mani Pokharel, Annu Rajbhandari, Rakshya R. Thapa Nepal Water Conservation Foundation

Transcript of Constructive Dialogues on Dams and Developments in Nepal

Page 1: Constructive Dialogues on Dams and Developments in Nepal

CONSTRUCTIVE DIALOGUE ON

ams andDevelopmentIN NEPAL

EDITORSAjaya Dixit � Pradeep Adhikari � Shiva Bisangkhe

CONTRIBUTORS

Pradeep Adhikari, Shiv Kumar Basnet,Vinay Bhandari, Shiva Bisangkhe, Deepen B. Bista,Ajaya Dixit, Sudesh K. Malla, Dina Mani Pokharel,Annu Rajbhandari, Rakshya R. Thapa

Nepal Water Conservation Foundation

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EDITORSAjaya Dixit � Pradeep Adhikari � Shiva Bisangkhe

Nepal Water Conservation Foundation

CONSTRUCTIVE DIALOGUE ON

ams andDevelopmentIN NEPAL

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© Copyright, 2004

IUCN–The World Conservation Union Nepal and Nepal Water Conservation Foundation

Reproduction of this publication for educational or other non-commercial purposes is authorisedwithout prior written permission from the copyright holders provided the source is fullyacknowledged. The views expressed in this publication do not necessarily reflect those of IUCNNepal or NWCF.

ISBN 99933-795-2-2

First Edition: 500 CopiesJuly, 2004

Cover DesignFormat Graphic StudioKathmandu, Nepal

LayoutNepal Water Conservation Foundation

Printed byFormat Printing Press, Kathmandu, Nepal

Nepal Water Conservation Foundation (NWCF)P.O. Box: 2221, Kathmandu, NepalPhone: 5528111, 5542354Fax: 5524816E-mail: [email protected]: www.nwcf.org.np

IUCN–The World Conservation Union NepalP.O. Box: 3923, Bakhundole, LalitpurPhone: 5528781, 5528761, 5526391Fax: 5536786E-mail: [email protected]

Published for National Steering Committee on Dams and Development by:

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PREFACE

In January 2003, a consultative process was initiated to discuss issues regarding dams

and development in Nepal. It was held in the context of the recommendations of the

report of the World Commission on Dams (WCD), Dams and Development. Participating

in this constructive engagement were government representatives, and their parastatals,

private hydropower developers, non-governmental research organisations, and local

people affected by dams.

As a part of the process, a scoping study was carried out, which sought to compare

Nepal’s legal provisions with the recommendations of Dams and Development. A task

force and a steering committee were formed to oversee the study, which interacted with

grassroots non-government organisations as well as those in the more formal sector.

The findings of the study were presented at a national-level stakeholders’ meeting.

Separate discussion programmes were held with government officials as well as at

many taskforce and steering committee meetings. The consultative process came to an

end in April 2004, when the draft report of scoping study was completed.

This book summarises the scoping study and the consultative activities. It suggests

that Nepal’s legal provisions do address many of the recommendations made in Dams

and Development, indeed even more progressively than the WCD’s report. It also notes

that these new policies on water and energy development and their management have

been introduced in Nepal’s pluralised policy terrain in the last decade and a half.

Nepal must translate them into more effective implementation to benefit the people

and the country while building local institutions and capacity.

The way forward is for Nepal to continue the process of preparing its own guidelines

on dams and development. The consultative process that this book describes has shown

that a participatory approach can yield encouraging outcomes in developing Nepal’s

water resources with sensitivity to both society and nature.

Nepal Water Conservation FoundationJuly 2004

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DISCLAIMER

This report summarises the findings of the scoping exercise. It is only meant to

serve as a platform for continuing the dialogue on issues of water resources

development and dams in Nepal. Its draft was discussed over a period of two

months and has been published only after incorporating comments from all

who participated in the consultative process. Some of the comments are

included in annexes 6a and 6b. This report can assist in the evolution of the

policy process, but it is not the policy document of any of the organisations

involved in the consultative process or IUCN.

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ACKNOWLEDGEMENTS

On behalf of the team conducting the scoping exercise we thank all who have

contributed directly or indirectly to this process. Special thanks go to all the

members of the Nepal’s Dams and Development Steering Committee who were

generous with their valuable time to discuss the issues as well as all those who

participated in the consultative process. We would also like to thank IUCN

Nepal for facilitating this exercise.

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Annexes ...................................................................................................................... 69-107Annex 1 : Comments on the WCD report Submitted to the

World Bank on 23rd January 2001 ........................................................70Annex 2 : Inventory of Electricity Generating Dams ...............................................79Annex 3a : National Stakeholder’s Workshop on Dams and Development ...............81Annex 3b : Consultation Meeting with NGOs .........................................................84Annex 3c : Consultation with Government Officials .................................................85Annex 4 : Status of Defining Issues .........................................................................86Annex 5 : Comparison of Asian Development Bank (ADB) and the

World Bank (WB) Policies on Water Related Issues ................................97Annex 6a : NEA Comments on Scoping Study Report .............................................101Annex 6b : Comments by Water and Energy Users’ Federation, Nepal on

the Scoping Study Report of Dams and Development in Nepal ............106

Water Flow Rhythm and Discord ........................................................................................ 1The World Commission on Dams Process ........................................................................... 1Values, Principles and Guidelines ....................................................................................... 2Response to Dams and Development .................................................................................. 3Dialogue on Dams and Development in Nepal ................................................................... 4Objectives of the Study ........................................................................................................ 5Methodology ....................................................................................................................... 6Organisation of this Report ................................................................................................. 8Policy and legal status vis-à-vis Strategic Priorities (SPs) .................................................. 8Public Discussion on Dams and Water Issues ....................................................................26Comments on Strategic Priorities ......................................................................................39Ideas, Debates, Changes and Policy Processes ...................................................................49Strategic Priorities: The Basis for a Way Forward .............................................................53Recommendations for Further Analysis .............................................................................56Constructive Engagement ...................................................................................................63In the end ...........................................................................................................................66Notes ..................................................................................................................................67References ..........................................................................................................................68

CONTENTS

Preface ................................................................................................................................ iiiDisclaimer ............................................................................................................................ vAcknowledgement ..............................................................................................................viiAcronyms............................................................................................................................. x

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ACRONYMS

ADB Asian Development BankAG Advisory GuidelinesCBO Community Based OrganisationCG Criteria GroupCHIA Cultural Heritage Impact AssessmentCMISP Community-Managed Irrigation Sector ProjectDAD Dams and DevelopmentDDC District Development CommitteeDDF Dams and Development ForumDDP Dams and Development ProjectDI Defining IssueDoED Department of Electricity DevelopmentDoI Department of IrrigationDWIDP Department of Water Induced Disaster PreventionEA Electricity ActEIA Environmental Impact AssessmentEPA Environment Protection ActEPR Environment Protection RegulationER Electricity RegulationETAFIC Electricity Tariff Fixation CommitteeGHG Green House GasesHDP Hydropower Development PolicyHIA Health Impact AssessmentHMG/N His Majesty’s Government of NepalICOLD International Commission on Large DamsIEE Initial Environment ExaminationIHA International Hydropower AssociationIIDS Institute of Integrated Development StudiesIPP Independent Power ProducersIRR Impoverishment, Risk and ResettlementIUCN The World Conservation UnionIWRM Integrated Water Resources ManagementJVS Jalasrot Vikas SansthaMDG Millennium Development GoalsMoPE Ministry of Population and EnvironmentMoWR Ministry of Water ResourcesMRDAP Mitigation, Resettlement and Development Action PlanMSHP Medium Scale Hydropower ProjectNEA Nepal Electricity AuthorityNGO Non-Governmental OrganisationNWCF Nepal Water Conservation FoundationPAP Project Affected PeoplePDF Power Development Fund

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PoE Panel of ExpertsPPP Public Private PartnershipRoR Run-of-RiverSAGUN Strengthened Action for Governance in Utilisation of Natural ResourcesSIA Social Impact AssessmentSNV Netherlands Development OrganisationSP Strategic PrioritySUP Social Upliftment ProgrammesUNEP United Nations Environment ProgrammeUSAID United States AidVDC Village Development CommitteeWAFED Water and Energy Users’ FederationWB The World BankWCD World Commission on DamsWECS Water and Energy Commission SecretariatWRA Water Resources ActWRR Water Resources RegulationWRS Water Resources Strategy of Nepal

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WATER FLOW RHYTHM AND DISCORD

Water is life. Its flow through ecosystems and the rhythms of seasonal precipitation

shape the livelihoods of the majority of the world’s population. Fulfilling basic water,

food and energy needs of a growing population is a major challenge, not only for

Nepal, but also for other countries, in South Asia and around the world. The difficulty

in meeting the demand for water underscores the fact that water is crucial for national

and local economies, for the biological functions of human beings, plants and animals,

and for overall ecological processes. Government and private agencies as well as social

and environmental groups, agree on the fundamental importance of water and on it

being a prerequisite to maintain a standard of living. Their views about how the need

for water should be met, however, often differ. The result can be a negotiated compromise

or, in the worst cases, impasses-ridden contestation.

The need for and utility of dams, particularly large ones, is a major topic of dispute

among various stakeholders in water resources planning, development and use.1 In

the 1980s and the 1990s, this debate became highly visible in the international arena.

Advances in information technology promoted alliances among groups spread across

the globe; together they ran campaigns raising questions about local projects. These

debates slowed the pace of construction of large dam projects and raised public

awareness about their social and environmental costs. Two opposing views emerged.

In one view, large dams are necessary for the water resource development required to

fulfil water and energy needs of the present as well as growing population in the future.

The other view is that the social and environmental costs associated with large dam

construction are too high and that their performances are poorer than promised.

THE WORLD COMMISSION ON DAMS PROCESS

In 1998, the World Commission on Dams (WCD) was formed in response to these

debates. The Commission created a base of knowledge about worldwide experiences

in building and operating large dams. The Commission proposed that its report Dams

and Development: A New Framework for Decision-making, form the foundation for a

negotiated approach. The report recognises that the concept of rights and the assessment

of risks are a means to identify legitimate stakeholders, negotiate development

outcomes, share benefits and provide for the social and economic rehabilitation of

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involuntarily displaced people. Implementing dispute management strategies, which

lead to outcomes that meet some, but not all, of the interests of stakeholders, the

WCD’s report Dams and Development (DAD) suggests, can reverse wrongs.

Assessing risks adds an important dimension to our understanding of how and to

what extent a project may affect people’s rights and of the risks of both voluntary

takers and involuntary bearers. Clarifying the context of rights for a proposed project is

seen as an essential step in identifying the legitimate claims and entitlements that may

arise upon implementing that project or its alternatives. In the past, many groups were

denied the opportunity to participate in decisions that posed risks to their lives and

livelihoods. Their voice in the decision-making process was not commensurate with

their exposure to risk.

VALUES, PRINCIPLES AND GUIDELINES

DAD proposes a ‘rights and risks’-based approach embracing five principles:

� Equity,

� Efficiency,

� Sustainability,

� Participatory decision making, and

� Accountability

Within its framework, DAD also proposes seven strategic priorities (SPs) that

aim to provide a principled way forward towards negotiated decision-making about

dam selection and its alternatives, construction and management. The seven strategic

priorities are

� Gaining public acceptance,

� Conducting a comprehensive options assessment,

� Addressing existing dams,

� Sustaining rivers and livelihoods,

� Recognising entitlements and sharing benefits,

� Ensuring compliance, and

� Sharing rivers for peace, development and security.

These strategic priorities constitute the core of the recommendations of DAD and

are complemented by 26 advisory guidelines (AGs) (see Table 1) and 152 defining

issues (DIs) that elaborate the guidelines.

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TABLE 1:Advisory Guidelines (AG) of DAD

1. Stakeholder Analysis

2. Negotiated Decision-Making Processes

3. Free, Prior and Informed Consent

4. Strategic Impact Assessment for Environmental,Social, Health and Cultural Heritage Issues

5. Project-Level Impact Assessment for Environmental,Social, Health and Cultural Heritage Issues

6. Multi-Criteria Analysis

7. Life Cycle Assessment

8. Greenhouse Gas Emissions

9. Distributional Analysis of Projects

10. Valuation of Social and Environmental Impacts

11. Improving Economic Risk Assessment

12. Ensuring Operating Rules Reflect Social andEnvironmental Concerns

13. Improving Reservoir Operations

14. Baseline Ecosystem Surveys

15. Environmental Flow Assessment

16. Maintaining Productive Fisheries

17. Baseline Social Conditions

18. Impoverishment Risk Analysis

19. Implementation of the Mitigation, Resettlement andDevelopment Action Plan

20. Project Benefit-Sharing Mechanisms

21. Compliance Plans

22. Independent Review Panels for Social and EnvironmentalMatters

23. Performance Bonds

24. Trust Funds

25. Integrity Pacts

26. Procedures for Shared Rivers

RESPONSE TO DAMS AND DEVELOPMENT

Globally, reactions to DAD ranged from strong support to outright rejection. Some

even rejected the report altogether. Even within a single organisation, a variety of

responses could be seen. Advocates lauded the opportunities DAD provides for finding

ways beyond the polarised debates of the past, while opponents condemned what

they saw as its inadequate coverage of the benefits derived from dam projects built in

the past. Others saw the guidelines as unrealistic and impractical and claimed that

they will unnecessarily delay the implementation of many projects.

Nepal’s response to DAD was similarly diverse. His Majesty Government of Nepal

(HMG/N) expressed reservations about the WCD framework and was critical of its report

(Annex 1).2 A number of consultative meetings were held after the report was published.

On 23 August 2001, Jalasrot Vikas Sanstha (JVS) organised an interactive meeting which

saw participants representing government and non-governmental organisations. They

worked in the water sector, for public utilities and in engineering colleges.3 The papers

presented at the meeting discussed the role of dams in Nepal vis-a-vis DAD and commented

on the proposed guidelines. The comments were mixed. Some participants opined that

the guidelines would prolong the period of implementation of projects and thus add to

the cost, while others claimed that the suggestions were useful in making dams in Nepal

respond to national and community needs.4

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DIALOGUE ON DAMS AND DEVELOPMENT IN NEPAL

A national-level dialogue on DAD began in Nepal in January 2003. Its overall mission

was phrased as follows:

To carry out national consultations on dams and development to consider the

relevance of the recommendations of the WCD and other bodies in the Nepalese

context with the ultimate aim of recommending development and adoption of a

national guideline for improved decision making, planning and management of

dams and alternatives for Nepal.

IUCN Nepal facilitated the dialogue and a steering committee was formed. The

committee consisted of representatives from various institutions (Chart 1). A subgroup

of this steering committee was the Task Force, with responsibility for detailed

planning of the work and on implementation of the activities. The Task Force met

1. Nepal Water Conservation Foundation2. Department of Electricity Development3. Nepal Agriculture Research Centre (NARC)4. Nepal Electricity Authority5. Winrock International6. International Centre for Integrated Mountain Development

(ICIMOD)7. World Wildlife Fund8. Water and Energy Users’ Federation-Nepal (WAFED)

9. Small Hydropower Development Association10. Department of Irrigation11. Water and Energy Commission Secretariat12. National Federation of Irrigation Water Users’

Association13. The World Conservation Union (IUCN)14. Department of Water Induced Disaster Prevention15. Ministry of Water Resources

CHART 1:Name of steering committee, task force and study team members

Ajaya Dixit1, Arjun Prasad Shrestha2, Ash Kumar Rai (Dr.)3, Bhoj Raj Regmi4, Bikash Pandey5, Binayak Bhadra(Dr.)6, Chandra Gurung (Dr.)7, D.B. Singh2, Damodar Bhattarai2, Dipak Gyawali1, Gopal Siwakoti ‘Chintan’8,Hari Bairagi Dahal9, Janak Lal Karmacharya (Dr.)4, Jeetendra Ghimire10, Keshab Dhoj Adhikari11, Keshav RajNeupane12, Lekh Man Singh11, Mahesh Banskota (Dr.)13, Mandira Shrestha6, Mohan Ratna Shakya4, NarayanP. Gautam14, R. K. Chhettri11, Sharada Prasad Sharma11, Shiv Kumar Basnet15

Task Force MembersAjaya Dixit, Arjun Prasad Shrestha, Bikash Pandey, Binayak Bhadra (Dr.), Damodar Bhattarai, GopalSiwakoti ‘Chintan’, Hari Bairagi Dahal, Jeetendra Ghimire, Keshab Dhoj Adhikari, Lekh Man Singh, MaheshBanskota (Dr.), Mohan Ratna Shayka, Sameer Karki13, Sharada Prasad Sharma

Study Team Members

Ajaya Dixit, Pradeep Adhikari1, Shiva Bisangkhe1, Rakshya R. Thapa1, Shiv Kumar Basnet,Annu Rajbhandari4, Sudesh K. Malla2, Dina Mani Pokharel8, Deepen B. Bista8, Vinay Bhandari1

Steering Committee Members

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eight times between January and August 2003. Its main responsibilities were to

commission a status report on dams and development issues in Nepal. It received

support from the United Nations Environmental Programme (UNEP) Dams and

Development Project (DDP) in holding the discussions needed to prepare the status

report and in preparing the report itself.

A ten-member team representing both the governmental and non-governmental

sector as well as voluntary groups carried out the study. They included experts in a

variety of disciplines among them engineering, law, environmental studies, social

science and development. Nepal Water Conservation Foundation (NWCF)

coordinated the study.

The study reviewed the guidelines in DAD in the light of Nepal’s constitutional

provisions, court directives, acts, policies, and regulations on water resource development

and management plans. It analysed legal provisions related to rivers, water and dams and

the degree to which they relate to the WCD’s guidelines. It

also reviewed environmental assessment provisions and the

Local Self-Governance Act including policy measures and

mechanisms for their implementation that had been put in

place in Nepal to address social and environmental questions.

The process of the scoping study is shown in Chart 2.

OBJECTIVES OF THE STUDY

The objectives of the study were as follows:

1. Analyse the existing plans, policies, regulations

and laws in Nepal which have a bearing on dams,

2. Compare guidelines of World Bank (WB), Asian

Development Bank (ADB) and related

institutions,

3. Investigate three hydropower projects Kali

Gandaki ‘A’, Khimti and Indrawati in light of

the guidelines of DAD,

4. Prepare a database of existing hydropower

dams in Nepal for use in defining what a large

dam means in the context of Nepal.

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METHODOLOGY

The study comprised the following activities:

1. Division of work among members of the study team: The team met six

times during the study period. In the first meeting, a decision was made about

the working framework for carrying out the study. A matrix of the seven strategic

priorities (SPs), twenty-six advisory guidelines (AGs) and 152 defining issues (DIs)

of DAD was used in order to compare them with Nepal’s legal provisions. This

approach was deliberately chosen to explore the interface at that level of details.

2. Integration of inputs from members: Each member of the team then worked

individually, analysing the proposal of DAD. Once the analysis of each member

was completed, their written summaries were compiled, synthesised and edited.

3. Collection of secondary documents: The following documents were collected from

Ministry of Water Resources, Nepal Electricity Authority (NEA) and private libraries:

a. Past consultations, government presentations and comments by international

financing agencies on dam-related matters.

b. The constitution of 1990 and acts, laws, plans, policies, gazettes, regulations,

and strategies currently operative in Nepal. The team reviewed almost all-legal

provisions related to water, environment, displacement and benefit sharing.

The team also looked at the Irrigation Policy, Nepal Biodiversity Strategy 2002,

Wetland Policy 2003, the Aquatic Act and the Soil and Water Conservation

Act, which cover livelihoods and the quality of aquatic ecosystems but are not

specifically related to rivers or dams. Though these documents are indirectly

relevant, their implications are not included in this report.

c. Manuals and guidelines related to hydropower development, irrigation and

drinking water supply.

d. Documents related to the Kali Gandaki ‘A’, Khimti and Indrawati hydropower

projects.

e. The policy documents of the WB and the ADB and the sustainability

guidelines of the International Hydropower Association (IHA).

4. Comparison and analysis: The documents collected were compared to the

guidelines of DAD. The focus was on:

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a. Hydropower development, and

b. Irrigation

References are also made to policies on

c. Drinking water supply

d. Forestry/natural resource management, and

e. Aquatic systems

5. Case studies: As stated in its objectives, the scoping exercise conducted a

comparative study of Kali Gandaki ‘A’, Khimti and Indrawati hydroelectric power

projects in order to compare DAD’s recommendations with the actual

implementation. But details of the case studies are not incorporated in the

report due to the lack of field verification. Only relevant lessons are drawn.

6. Preparation of dam inventory: The study team prepared a list of dams constructed

in Nepal, mainly for hydropower generation (Annex 2). Technical information, including

the area of land inundated and the number of the families displaced, was also collected.

The list however is not exhaustive as the required information of some dams was

not available. One of the objectives of preparing the dam inventory was to create a

foundation for a dialogue to define large and small dams in Nepal in the future.

7. Consultations: Three rounds of consultative meeting were held. The first was

with organisations involved in flood disaster mitigation, irrigation management,

water supply and sanitation, and conflict management. The second round chiefly

comprised the national-level stakeholders in a meeting held in Kathmandu on

September 12, 2003, at which the draft report was presented. A third set of

meetings was later held with key government officials. The name of the

participants and their respective agencies are listed in Annexes 3a, 3b and 3c.

8. Review by members of the Task Force and Steering Committee: At two

different meetings the members of the Task Force were presented with an outline

and the preliminary findings of the study. They also reviewed the draft report

and provided comments on it. On 30 June, 2003, following a presentation by

the study team members, the Steering Committee endorsed the objectives and

processes of the study.

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The actual scoping excercise was conducted over a period of three months in

2003. Even though the consultative process was extensive, as the writing proceeded it

became apparent that more time was needed for consultations and discussions but

was not available due to the busy schedule of the stakeholder representatives. Some

documents relevant to the dam inventory and case studies were simply impossible to

trace. The finding of the case studies were not validated at the site itself with field

visits. This would have required a larger study with substantial funding.5

ORGANISATION OF THIS REPORT

The following section deals with the results of the scoping exercise. It includes a

comparison of Nepal’s legal provisions with the proposals made by DAD.* The next

section provides a summary of the public discussions in Nepal. It also presents a summary

of the views expressed in the consultative meetings. The report then discusses WB, ADB

and IHA’s guidelines, which is followed by comments on the strategic priorities. The next

section presents a discussion on the public policy processes. Recommendations for further

analysis are provided, as is a discussion on the scoping process as constructive engagement.

POLICY AND LEGAL STATUS vis-à-vis STRATEGIC PRIORITIES (SPs)

In the following section we compare the DAD’s seven SPs, 26 AGs and 152 defining

issues (DI) as they relate to Nepali legal provisions. For the sake of simplicity the term

‘legal provisions’ has been used to include acts, laws, polices, regulations and manuals.

The status of DIs is summarised in annex 4. Table 2 to 7 show the comparison of

Nepal’s legal provisions with the DIs of each strategic priority. In the first column

provisions that match the DIs are summarised. In the next column those that do not

are listed as ‘issues to address’. The detailed comparison is available as a separate

document. The related legal provisions are listed in box 1 to 7.

* The team members agreed about where Nepal’s legal provisions conformed and diverged, but there were differences regardingthe interprerations of some AGs and DIs. Where a consensus was reached, there is a synthesised statement. In cases whereindividual perceptions differed and no reconciliation was possible

the team decided to the record differences as they were.

6 The

contents of the provisions are also explained.

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The Constitution of the Kingdom of Nepal, 1990 (Article 16 & 17),

Muluki Ain (National Code), 1963(Chapter- Land Cultivation, Section 1)

Electricity Regulation, 1993 (Rule 16)

Water Resources Act, 1992 (Section 4), andWater Resources Regulation, 1993 (Rule 19)

Land Acquisition Act, 1977 (Section 3 and 4)

Hydropower Development Policy, 2001 (Policy 5.8)

Environment Protection Regulation, 1997 (Rule 4, 7, 10 and 11.2)

National EIA guidelines, 1993 (Guideline 14, 15 and 27)

Manual for Public Involvement in the EIA process ofHydropower Projects Part 2

Manual for Preparing Scoping Document for EnvironmentalImpact Assessments of Hydropower Projects.

1. Gaining public acceptanceThree guidelines and twelve defining

issues are related to this strategic

priority. Laws and other documents

which are related to the defining issues

of this strategic priority are listed in

box 1.

The main document concerning

right of people is the constitution of

the Kingdom of Nepal 1990. Part III

of the Constitution guarantees all

citizens of Nepal fundamental rights

including the enjoyment of rights,

privileges and immunities with regard

to life, liberty and property. Article 16 of the Constitution guarantees the right to

information, which states that every citizen shall have the right to demand and receive

information on any matter of public importance. This right is limited, though, in that

the state cannot be forced to provide all information, particularly if it is considered a

state secret. On the issue of the right to information, the Supreme Court has made an

explicit ruling and prescribed eight guidelines on the procedures to follow in providing

information.7

1. The plaintiffs should ask for a list of documents related to different subjects

from the defendants,

2. If the defendants provide that list within seven days, the plaintiffs should

demand an arrangement for the inspection of the concerned documents,

3. Once a demand is made according to paragraph 2, the defendants should

provide a notice to the plaintiffs specifying the time, date and place (for

inspection) within three days,

4. Notes should be made after the inspection and if copies of the documents

are to be made, a request should be made to the specified officer,

5. If rules are lacking for providing copies, certified copies should be provided

after charging the real cost for making such copies,

6. If the defendants cannot permit the plaintiffs to inspect the documents,

take notes from them and make copies of them, they should state the

reasons and notify the plaintiffs within three days,

Box: 1

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7. If the plaintiffs are denied access, they can file a petition in the Supreme

Court if they are not satisfied with the reasons specified or for denial of

access, and

8. The Procedure for action on (the) petition shall be according to the Rules

of the Supreme Court.

Section 5.4 of the Hydropower Development Policy (HDP) of 2000 provides for

appropriate incentives to be given to a developer and for a transparent procedure for

attracting national and foreign investments in the development of hydropower. The

key word in the HDP is ‘transparency’.

The Constitution also addresses the rights of citizens, one of the defining issues

related to gaining public acceptance. It recognises the right to private property as a

fundamental right. In particular, Article 17 states that all citizens shall, subject to the

existing laws, have the right to acquire, own, sell and otherwise dispose of property.

The State, shall not, except in the public interest, requisition, acquire or create any

encumbrance on the property of any person without fair compensation, for which a

procedure is laid out.

The Land Acquisition Act of 1977 provides HMG with the power to acquire

any land in any place for any public purpose as long as compensation is provided

for. The government may decide to acquire land for an institution upon its request

to construct residential quarters for its staff, to operate a project or to construct a

godown for the storage of any commodity. According to the act, public purposes

include functions undertaken in the interest of or, for the benefit or use of, the

general public as well as functions to be undertaken by HMG.

The Water Resources Act of 1992 also touches upon land acquisition and

compensation. It states that HMG may acquire land and develop water resources for

the purpose of extensive public use. Similarly, the Electricity Act of 1992 mentions

that the licensee may submit an application to HMG to purchase the land or house of

any person if it is needed for the generation, transmission or distribution of electricity.

Upon the receipt of such an application, HMG may make the land or house so

requisitioned available to any corporate body under the prevailing laws.

Another provision relating to water rights is mentioned in the Muluki Ain of

2020 B.S. (the National Code of 1963), which lays out rights to irrigation water.

According to the Code, any action that submerges private land with a dam or reduces

supply to it with the redirection of water, implicitly requires the acceptance of such

an action by the affected persons. The Code states that ‘water shall not be made

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available to others until the requirements of the person who constructed an irrigation

channel at his own expense with his own physical labour are first met.’8 Another

provision of the Muluki Ain acknowledges existing rights to water as follows: ‘A

new irrigation channel may be constructed at a point higher than the existing one

only if the amount of water available to the field irrigated by the old channel is

not reduced’.

The Environment Protection Act of 1997 and the Environment Protection

Regulations of 1997 specify the following steps for conducting Environment Impact

Assessment of a project (EIA). First, the project proponent must publish a notice in

any national-level newspaper requesting the VDC or municipality where the project

is to be implemented as well as schools, hospitals, health posts and concerned

individuals or institutions of that area to provide in writing their comments

concerning any possible impacts of the proposed project on the environment within

15 days of the publication of the notice. Anyone who has an opinion or suggestion

about the project is called upon to give official voice to it.

In addition, the project proponent must solicit further comments by affixing

notices at the offices of concerned VDCs or municipalities, DDC offices, schools,

hospitals and health posts. Again, all concerned are requested to submit written

statements about the possible environmental impact of implementing the project

within 15 days of posting. A muchulka (a witnessed public endorsement) of the

posting also has to be prepared. The third way the project proponent has to collect

opinion and suggestions is to organise a public hearing about the proposal in the

VDC or municipality where the proposal is to be implemented. All opinion and

suggestions received are to be included in the EIA report.

The Environmental Protection Act and Regulations provide a legal basis for

undertaking an EIA. The guidelines state that the main purpose of conducting a

scoping exercise in the early stages of project planning is to clearly define all the

communities and agencies which should be involved in making decisions relating

to the proposal. The scoping exercise is designed to determine which persons are

to be involved in discussions and when and how communication with them is to be

undertaken. For this, consent must be obtained from the concerned authorities and

government agencies. While formulating a plan for public involvement, the

proponent, concerned experts, persons likely to be affected by the project, and

special interest groups should be included in the list of persons to be contacted.

The guidelines also stipulate that the data and information collected should be

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The Constitution of the Kingdom of Nepal 1990 (Article 17, 26(4)),

Muluki Ain (National Code) 1963 (Chapter- Land Cultivation,

Section 1) Electricity Regulation 1993 (Rule 12 & 16), Water

Resources Act 1992 (Section 4, 7, 8 & 18), Water Resources

Regulation 1993 (Rule 17,18 & 19), Land Acquisition Act 1977

(Section 3), Hydropower Development Policy 2001 (Policy 5.8,

6.1 & 6.2) , Environment Protection Act 1997 (Section 3, 6, 7,

11, 13 & 15-20) , Environment Protection Regulation 1997 (Rule

3, 4, 5, 7, 10, 11 & 50) and National EIA guidelines 1993

(Guideline 3, 6, 7, 12, 13, 14, 15, 17, 27, 28, 30, 32, 34, 38 &

45 to 49) and Manual for Public Involvement in the EIA process

of Hydropower Projects Part 2 & Part 3.

compiled and organised and then forwarded by the project proponent to relevant

persons and organisations for their comments. Larger projects, after publishing

public notices, must organise meetings at the project site as well as at the central

level, in order to solicit suggestions and comments. People likely to be affected by

the proposed project must be notified directly.

Two recent publications prepared by the Department of Electricity Development

(DoED) provide even more encompassing instructions with regard to executing in

this strategic priority. These publications are the Manual on Public Involvement in

the EIA Process of Hydropower Projects and the Manual on Preparing Scoping Documents

for the Environmental Impact Assessment of Hydropower Projects. They provide guidelines

on dealing with public consultations when hydropower projects are developed and

touch upon many of the issues WCD report raises. Table 2 summarises provisions on

gaining public acceptance.

2. Conducting comprehensive options assessmentThere are eight guidelines and forty-nine defining issues under this strategic priority. Among

these guidelines, five are addressed directly or indirectly by our existing legal documents and

manuals including the constitution, which are listed in box 2. Rest of the guidelines: the

assessment of greenhouse gases (GHG), the distributional analysis of a project and risk

assessment improvement are not included in any plan or policy.

The Water Resources Act of 1992 aims to make timely legal arrangements for

determining the beneficial uses of water resources, preventing environmental and other

hazardous effects and keeping water resources free of pollution. The Act mentions that

no person is entitled to utilise water

resources without a license except in the

case of drinking and other domestic uses

and irrigation. A person or a corporate

body that desires to conduct a survey

of, or to utilise, water resources has to

submit an application, along with an

environmental study report and other

prescribed particulars to the prescribed

officer or authority. On receipt of the

application, the designated officer shall

conduct or have conducted all necessary

Box: 2

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TABLE 2:Gaining public acceptance

2.1 Stakeholders analysis

Defining Issues: Recognise existing rights; identify vulnerable and those at risks; identify constraints for stakeholder involvement

Conformity Issues to address

� The Constitution guarantees the right to property and � DoED manual on public involvement partly spellsto information. stakeholders participation but the provision is not mandatory.

� Right to appropriate water from common water � Local people are unaware about their rights.sources accorded to persons who construct irriga- � Vulnerable and those at risk are not mentioned.tion canals early with their own cost and efforts. � Constraints to public involvement are not identified.

� Constructing canals upstream of existing onesis prohibited if supply to them is affected.

2.2 Negotiated decision-making

Defining issues: Ensure stakeholder representation; ensure integrity of community processes; provide adequate time for consultation; addresspower imbalances; ensure transparency; assist in negotiation

Conformity Issues to address

� Stakeholders’ representation recognised. � DoED manuals recommend stakeholders’ analysis but is� Provisions have been made for public notice and not mandatory.

public hearing. � The concept of stakeholder forum is not envisaged.� National EIA guideline has provision to � Illiteracy, inaccessible sites and backwardness deter full fledged

facilitate early agreement between PAPs representation and participation of stakeholders.and the proponent on contentious issues. � Organisation and practices of public hearing need improvement. Local

� VDC can facilitate in addressing the issue. leaders and politicians influence the process of consultation.� Public consultation/public hearing/public notice are � The provision regarding the consultation does not consider the

done during EIA. implications of agricultural and other local activities.� Constitution recognises the issue of representation. � Many regions are remote and time allocated for consultation is inadequate.

� Language (English to Nepali) acts as barrier for effective consultationand for dissemination of information.

� Local stakeholders are not cognizant of the scale of impacts.� VDC is a political entity and tends to be influenced by narrow partisan

interests and politics.� Implementation of legal provisions is weak.� Extent/degree of transparency is not clearly defined.� The process of public consultation needs to be made more

participatory and transparent.

2.3 Get free, prior and informed consent

Defining issues: Ensure broad representation/inclusiveness; establish an independent dispute resolution mechanism

Conformity Issues to address

� People can furnish their reaction about � Information flow is one way (Domination of one notion ofproposed project. development paradigm or technical choice).

� Provisions exist for an Inquiry Committee related to � Actual beneficiaries at community level and PAPs are notutilisation of water resources. included in the process. Public notice, public hearing have

procedural limitations.� Illiterate persons cannot participate and lose out.� The Inquiry Committee is not independent. Its working

procedure is not defined or clearly mandated.

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investigations and issue a license to the applicant after prescribing certain terms. The

Water Resources Act also prioritises the utilisation of water resources as per the

following hierarchy:

a. Drinking water and domestic uses;

b. Irrigation;

c. Agricultural uses such as animal husbandry and fishery;

d. Hydroelectricity;

e. Cottage industry, industrial enterprise and mining uses;

f. Navigation;

g. Recreational uses; and

h. Other uses

The Water Resources Act mentions that the government may, by a notification

published in the Nepal Gazette, set a quality standard for the water resources used for

various purposes. Similarly, the government may also prescribe a pollution toleration

limit for water resources with the objective of ensuring water quality. No one is allowed

to pollute water resources by the disposal of any litter, industrial wastes, poisons,

chemicals or toxic substances that exceeds the pollution tolerance limit prescribed by

the Act. Water resources shall be utilised in a manner such that there is no substantial

adverse effect on the environment by way of soil erosion, flooding, landslides or other

similar phenomenon. If any person causes an adverse effect, or demolishes, destroys

or causes harm with malicious intent to any source of drinking water, dam, canal or

any other structure related to the utilisation of water resources, she/he can be punished

with a fine or imprisonment or both.

The Electricity Act of 1992 has a similar provision about licensing needed to conduct

a survey related to the generation, transmission or distribution of electricity. Section

5.15 of the Hydropower Development Policy describes the proper arrangements be

instituted in order to circumvent risks likely to arise from hydropower projects.

The National EIA Guidelines of 1993 also contain provisions applicable to the defining

issues related to comprehensive options assessment. Guidelines 7, 12, 13 and 27 (2) deal

with the processes of project screening and making an inventory of options. Guideline 14

(d) makes provisions related to the implementation of mitigation measures, while Guideline

28 makes arrangements for publicising impact assessment reports for review and comment.

The issues are listed in Table 3.

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TABLE 3:Comprehensive options assessment

3.2 Conduct project level impact assessment for environmental, social, health and cultural heritage issues

Defining issues: Conduct two-staged impact assessment, i.e., scoping and assessment phases; integrate technical, environmental andsocial studies in the design; conduct IAs independent from project financing and developers; comply internationalstandards for EIA, SIA, HIA and CHIA; Appoint independent panel of experts; open local liaison office; makeagreement to implement the mitigation measures; arrange for auditing and monitoring; put a redress mechanism forgrievance; publicise IAs.

3.1 Conduct SIA for environmental, social, health and cultural heritage issues

Defining issues: Incorporate environmental and social criteria; screen projects; reduce up-front planning and preparation cost; provide options ofimproving the performance of existing dams and other assets

Conformity Issues to address

� Existing legal provisions address the issues to some extent. � Stakeholders cannot participate during option assessment stage.� Alternatives are selected at the project level. � Existing provisions are not implemented at plans, policy and� NEA incorporated some environmental issues while central level decisions.

identifying 10-200 MW projects in screening rating and � Projects face financial, technical and institutional constraintsranking study under MSHP. for conducting SIA.

� Provisions are insufficient, however they incorporate � Accountability and transparency issues are not emphasised.stakeholders’ view early in project planning. � EIA is taken as an impediment rather than a tool to

� EIA has been a positive tool of pro-society and mitigate negative impacts.pro-environment development vision.

� The issues of minimising cost is realised.

Issues to address

� IEE and EIA processes are weak.� Quality of EIA reports need improvements.� Field visits during assessment phase are of short duration to identify

issues.� Methods of impact assessment is in embryonic stage.� Technical design keeps on changing during optimisation and

issues identified earlier become irrelevant.� The provisions are insufficient to make integrated technical, environmental

and social analysis in the design stage.� Designed standard are generally not complied with international standards.� No clear procedures exist to select an independent PoE.� Report of PoE is not made public.� PoE includes conditions rather than providing overall assistance to the

government or developer.� Liaison offices have inadequate information. EIA reports are not

published in local language. So local people do not understand them.� The opening of the liaison office is not mandatory.� Provisions about the support for auditing and monitoring are not

explicitly stated in legal documents.� Mitigation budget is ad-hoc. Also it is not properly assessed.� Institutional arrangement for compliance is not clear.� Transparency is poor and monitoring is weak.� Acts and institution do not mention auditing and monitoring.� Post project monitoring is ineffective.� The provision of mechanism for redress is not clear.

Conformity

� Existing provisions incorporate these issues to some extent.� National EIA Guidelines, 1993 cover most of the issues.� The practice in place has helped establish

dialogue among stakeholders.� Major environmental and social issues are identified to

help minimise cost of mitigation.� Multi-disciplinary team undertakes EIA studies.� Selection of environmentally sustainable options is possible.� EIA meets requirements of the financing agencies e.g. ADB,

WB, etc.� With regard to standard, National EIA Guidelines have

certain provisions.� MoPE does require the views of a Panel of Experts (POE)

on EIA reports before approval.� The POE is multifaceted and some of the consultants are

independent.� Local liaison offices have been established in some

projects (Kali Gandaki A).� The mitigation measures are integral part of the EIA approved

by MoPE.� EIA report incorporates environmental management plan.� The Acts do not require preparing resettlement plan but it is

carried out during EIA process as part of public�hearing/consultation� MoPE makes project document public and interested persons

can use them.

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4.5 Assess greenhouse gas emissions

Defining issues: Assess CO2, CH4, and Nitrous Oxide (N2O); assess the characteristics (size, temperature, bathymetry, primaryproductivity etc) of reservoir(s); inundated area(s); estimate the cumulative emissions.

� Existing provisions do not mention need to assessing greenhouse gas emissions.

3.6 Conduct distributional analysis of projects

Defining issues: Assess equity/poverty; conduct macroeconomic/regional analysis; conduct economic distributional analysis

Conformity Issues to address� The Local Self Governance Act by ensuring to flow of some � No legal instrument to conduct distributional analysis

percentage of revenue to the district responds to theissue of equity.

3.3 Conduct multi-criteria analysis

Defining issues: Prepare ToR; conduct stakeholder analysis; establish information centre; form stakeholder forum; formmultidisciplinary planning team; prepare options inventory, screen options; present options to stakeholder forum;conduct public hearing; select the suitable option.

Conformity Issues to address

� ToR guides project level EIA. � Many times, ToR do not cover all the issues at the site.� DoED Manual guides the EIA process for stakeholders’ � No instrument for assessing important policy and plan level impacts.

analysis and for information dissemination. It recognises � DoED manual are not legally binding.the concept of stakeholder forum. � Acts and regulations do not mention about stakeholder analysis

� Without establishing information clearing house it is and stakeholder forum.disseminated through public notice and public hearing. � There is no mention of information centre in any Act or Regulation.

� Many projects form multidisciplinary planning team, � No provision exists to present selected options to any forum.though not specifically stated. � Multi-and interdisciplinary team is formed to inquire into policies and plans.

� Some guidance for assessing options are in place. � Options selection is not legally binding.� EPA, EPR and EIA guidelines require identification � EIA studies do not cover all issues identified in EIA guidelines,

and selection of alternatives. and quality and effectiveness of mitigation measures need improvement.� Public hearing is conducted at project level. � No systematic practice of selecting alternatives.� Outputs of EIA study can be taken as input for � Selection procedure of a particular option needs to be made transparent.

selecting suitable option during feasibility study. � No simple mechanism for PAPs to express concerns.� The existing provision of public hearing need improvements.

3.4 Conduct life-cycle assessment

Defining issues: Categorise different stages for each options; identify material flows and resource impacts at each stage; compareeach option with a set of indicators (efficiency, emissions etc.); identify the range and magnitude of subsidies/externalfactors/incentives

� The provisions do not mention about conducting life-cycle assessment of a project.

3.7 Conduct valuation of social and environmental impacts

Defining issues: Identify/select impacts to be valued; conduct valuation studies; conduct public hearings.

Conformity Issues to address� Qualitative analysis is done to identify/select � Intangible issues like emotional aspects are difficult to be valued.

impacts. � No procedure exists for making quantitative valuation.� Public hearing is conducted. � Lot of assumptions are made during quantitative valuation.

� Theoretical exercises might lead to wrong conclusions.� No provision mentions the need to conduct valuation study.� PAP can rarely voice their concerns in public consultation meetings.� The provisions of public hearing need to be improved.

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3. Addressing existing damsThis priority includes two guidelines and twenty-nine defining

issues. The documents related to this strategic priority are listed

in box 3.

Section 7 of the Water Resources Act of 1992 prioritises

the utilisation of water resources, while Article 17 of the

Constitution, Section 3 of the Land Acquisition Act and

Guideline 27(2b) of the National EIA Guidelines deal with

compensation for people whose property is acquired. Policy

6.1.1 of the Hydropower Development Policy calls for preserving

environmental flow in a river or rivulet.

According to Guideline 32(c) of the National EIA Guidelines, people should be

informed about potential environmental damage in a timely manner and Guideline 35

provides for the regular monitoring of the environmental impact of a project in order to

obtain the data and information needed to draw accurate conclusions. Environmental

impact monitoring generates the information required to ensure that project

3.8 Improve economic risk assessment

Defining issues: General approach,-Include risks assessment in planning cycle; identify/select risk as a part of larger stakeholder/multi-criteria processes; include ranges for the risk and sensitivity analysis on the basis of past performance of large dams;complement sensitivity analysis with full probabilistic risk analysis

Conformity Issues to address� Risk, sensitivity and probabilistic analysis is � The identification of risk is not legally binding.

carried out by promoters. � Lack of clarity and comprehensiveness to identify risk.� Legal provisions do not require risk assessment

in steps of planning cycle.� Risks faced by others tends to be underplayed.

At all stages– Improve prediction of project costs� Prediction of the project costs is done by promoters. � Project cost tend to be site specific and difficult to predict due

to unforeseen problems during construction.� Legally not a recognised issue.� Different projects have different context, and varying reasons for

escalation of cost.At options assessment stage– Conduct simple sensitivity analysis; compare the options qualitatively with uncertainty associated with the

cost and benefit

� Carried out by promoters/developers. � Not specified in laws and policies.

At the feasibility stage– Conduct full probabilistic risk analysis of economic profitability; prepare modelling of changes in hydrological estimates (climate change etc.); investigate the likely benefits of risk reduction measures.

� Not specified in legal provisions.� Poor coordination with DHM and other departments.� Lack of legal and policy clarity.� The policy documents do not acknowledge that water science, soil, climate

and ecology contain elements of uncertainty.

The Constitution of the Kingdom of Nepal

1990 (Article 17.3); Land Acquisition Act

1977 (Section 3); Environment Protection

Act 1997 (Section 13 & 17); Water

Resources Act 1992 (Section 7);

Hydropower Development Policy 2001

(Policy 6.1) and National EIA guidelines

1993 (Guideline 27, 32, 35 & 38).

Box: 3

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TABLE 4:Address existing dams

4.1 Ensure operating rules to reflect social/environmental concern

Defining issues : Ensure emergency warning/evacuation plans; maintain downstream drinking water/environmental requirements; ensuregood quality of water to downstream during reservoir filling; adopt compensation plan; release environmental flow;release minimum technical flow; release maximum ramp rates for downstream; ensure water allocations during normaloperation; manage operation during normal/exceptional floods; warn people for potential dangers; formulate rules forevacuation of people and animals; set out rule for opening spillway gates; conduct periodic safety inspection; formulatedrawdown procedure if dam safety is in doubt; monitor relevant operation data; disseminate data to stakeholders;review operating rule periodically

Issues to address

� Although EIA report includes the provisions for emergency warning, itis not legally binding.

� Provisions of providing information to people do not exist.

� There are no legal provisions to formulate plan for evacuation ofpeople and animals.

� Emergency warning mechanism is limited to assess performance.

� No mechanism to ensure downstream drinking water/environmentalrequirement. Usually the downstream is completely dry during leanseason.

� No mechanism of implementing water allocation as per acts.

� There are cases where the affected people complained that they did notget adequate and timely compensation.

� Hydropower Development Policy is not legally binding provision aboutenvironmental flow.

� None of the legal provisions mention technical flow and release ofmaximum ramp rates for downstream reaches.

� No provision categorically states the issue of normal and exceptionalfloods.

� Although National EIA guidelines 1993 mention about institutionalcapacity building, nothing is mentioned about training for extremeevents.

� The functioning of monitoring system is not effective due to lack ofresources.

� The assumptions of design sedimentation rate is not revisited.

� The effectiveness of catchment management programme has not beenassessed in terms of sediment yield.

Conformity

� Generally EIA report includes provision for emergencywarning system.

� The Hydropower Development Policy recognises the issueof environmental flow and suggests that 10 per cent flowbe released for downstream reaches.

� Water Resources Act (WRA) sets priority to ensureallocation according to the set priority.

� WRA has set drinking water as the first priority.

� Only Land Acquisition Act, 1977 deals the issue ofcompensation.

� In case of the IPP, direct negotiation between the affectedpeople and the proponent is encouraged.

� IPPs may develop basin-level decision support systems tooptimise interactive reservoir operation and optimisingoperation.

� Provision is in place for monitoring.

� The sedimentation rate of Kulekhani reservoir wasmonitored.

� In Kulekhani catchment management programme hasbeen implemented.

� In Kulekhani a sloping intake has been built to minimiseimpact of sedimentation.

� Sediment flushing is done in very limited RoR projects.

implementation has the least possible adverse environmental impact on the people

and the environment in the area it serves.

Out of the twelve defining issues under the guideline related to the improvement

of reservoir operations, the Water Resources Act addresses only one. The issues are listed

in Table 4.

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4. Sustaining rivers and livelihoodsThere are three guidelines and fifteen defining issues under the

strategic priority of sustaining rivers and livelihoods. The

documents listed in box 4 address some of these issues.

Rule 7 of the EPR requires that a report on the IEE and the

EIA be carried out before implementation is prepared. This report

includes an assessment of the impact on social and economic,

cultural and physical, chemical and biological factors. A project’s

likely impact in terms of human health, any degradation of cultivable land or destruction of

forests, and any changes in social, cultural and religious norms and values, populations,

flora and fauna, and natural habitats and communities has to be included.

Guideline 14(b) of the National EIA Guidelines stipulates that data and information

relevant to the nature of the project and a preliminary list of potential environmental

impacts and practical alternatives have to be collected. This information is to be

supplemented with information about the proposed project, maps, drawings and other

relevant materials. Guideline 23(a) recommends a study of the socio-economic impacts

of project activities that would bring about changes in the existing economic and social

conditions of the communities within the project area or in its vicinity.

A project’s socio-economic impacts may be beneficial or adverse; both types need to

be identified. Guideline 23(b) requires that the effects on biophysical resources like

vegetation, wildlife, crops, and aquatic life be listed. Guideline 25 provides details about

impact prediction; it requires that special attention be paid to the magnitude, extent and

duration of impact. Guideline 13(1) makes provisions for completing project screening,

whose aim is to uncover alternatives to the proposed activities. Guideline 27(2) advocates

including a comparative study of the adverse and beneficial impacts of a project, taking into

consideration the alternative of total abandonment of the project, too. Guideline 27.2(c)

Environment Protection Regulation

1997 (Rule 5 & 7); National EIA

Guidelines 1993 (Guideline 3, 13, 14

& 23-27) and Hydropower

Development Policy 6.1.2

Box: 4

4.2 Improve reservoir operations

Defining issues : Collect views on current reservoir operation with stakeholder; record /confirm changes in the priority of water uses; record/confirm changes in the priority of water uses; optimize reservoir operation; asses the ability to operate the reservoiroptimally; provide clear procedure for emergency warning; provide operator training for extreme events; ensure monitoringsystems are in condition; monitor sediment in the reservoir quantitatively/qualitatively; minimize sediment deposition;remove accumulated deposits; launch catchment management program;

Conformity Issues to address

� The provision for the priority of water uses is � Prioritisation of water use is relatively rigid, which may have to be alteredlegally binding. as situation changes.

� Provision is in place for monitoring. � Several constraints impede effective functioning of the monitoring systems.

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5. Recognising entitlements and sharing benefitsFour guidelines and seventeen defining issues are elaborated under this strategic priority.

The four guidelines are the identification of baseline social conditions, the analysis of

impoverishment risks, the implementation of mitigation, resettlement and development

action plan (MRDAP) and the development of a benefit-sharing mechanism. The

provisions listed in box 5 contain issues related to this strategic priority.

As the Water Resources Act and the Land Acquisition Act provide HMG with the

power to acquire any land in any place for any public purpose, subject to the

TABLE: 5Sustain rivers/livelihood

suggests adopting corrective measures like fish ladders in dams and weirs. The issues related

to sustaining rivers and livelihoods are listed in Table 5.

5.1 Conduct baseline ecosystem surveys

Defining issues: Study life cycle of fish species (especially migratory species); identify the distribution of habitat of endangered species;locate important areas for biodiversity; identify key natural resources for riverine communities

Conformity Issues to address

� EIA guidelines provide suggestions for collecting � The list of endangered species is not regularly updated.information on aquatic life. � Monitoting of performance needs to be strengthened.

� EIA guidelines mention fish pass. � Acts and Regulations do not mention these issues.

5.2 Assess environmental flow

Defining issues : Assess the affected river upstream/downstream; Identify ecosystem components; develop predictive capacity onbiophysical responses; predict social impacts of biophysical responses; create scenarios (with varying social,biophysical and economic parameters); select/Implement one scenario

Conformity Issues to address

� EIA guidelines cover the issue. � Monitoring of performance needs improvement.� Legally established. � Resources gap and technological constraints hamper effective� EIA guidelines make provision on choosing alternatives. functioning.

� Release of environmental flow is not legally binding. Effectivenesshas not been assessed.

5.3 Maintain productive fisheries

Defining issues : Propose sound fish pass design; prevent the loss of endangered fish biodiversity; maintain fish stock; ensure long-term sustainability; produce fish for local consumption/export

Conformity Issues to address

� EIA guidelines have incorporated these issues � Fish passage arrangement in Nepal are very limited and there is noto some extent. criteria for judging soundness of a design.

� Methods of maintaining wild fish stock for export and localconsumption are not mentioned.

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compensatory principles provided under these laws,

they touch upon some of the defining issue related

to benefit sharing.

Rule 7 of the EPR of 1997 calls for collecting

baseline social, economic and cultural information.

Article 17 of the EPA deals with compensation for

affected people.

Sections 5.8, 5.14, 6.1.3 and 6.4.4 of the

Hydropower Development Policy of 2001 suggest

ways to minimise adverse environmental effects as

well as to make proper arrangements for

rehabilitating displaced families, providing appropriate benefits at the local level while

operating hydropower projects, rehabilitating and resettling affected people as per the

standards set by HMG/N and providing one per cent of the royalties received by HMG/

N directly to the affected VDC. This royalty is to be used for meeting rural electrification

objectives.

The Local Self-Governance Regulation declares that 10 per cent of the royalties

received by HMG/N from utilising water resource is to be provided to the affected

district. The DoED has been providing this amount to sixteen districts since 2000/

2001; a total of Rs 57,980,199 has been disbursed.

Rules 19 (1), (2) and (3) of the Water Resources Regulation, Rules 16 (1), (2)

and (3) of the Electricity Regulation and Rule 4 of EPR call for publishing notices in

connection with assessing the impacts of proposed projects. Guideline 14 (c) of the

National EIA Guidelines goes even further; it requires that the data and information

collected during the scoping study be made public to concerned people and

organisations for their comments.

Guideline 25 of the EIA identifies three different approaches to predict impacts:

magnitude, extent and duration. Guideline 27(2b) stipulates that compensation be

paid to mitigate unavoidable or adverse impacts. Compensatory measures include

restoring damaged natural resources, rehabilitating displaced settlements, and

compensating affected persons. Guideline 27(e) provides for incorporating mitigation

measures into a project design as a part of the construction and operational phases of

that project. Table 6 shows conformity to and divergence from this priority.

Land Acquisition Act 1977 (Section 3 );

Environment Protection Act 1997 (Section 17);

Environment Protection Regulation 1997 (Rule

5, 7); Hydropower Development Policy 2001

(Policy 5.8, 5.14, 6.1, 6.4 ); Local Self-

Governance Act 1999 (Section 220), Local

Self-Governance Regulation 1999 (Rule 211)

and National EIA guidelines 1993 (Guidelines

14, 23, 25, 27)

Box: 5

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TABLE 6:Recognising Entitlements and Sharing Benefits

6.1 Construct baseline social conditions

Defining issues : Assess baseline social conditions for all impact areas/communities; ensure the base line social information.

Conformity Issues to address

� EIA incorporates the baseline social information. � Reports are based on secondary data. Institutional requirements forsustained data collection is insufficient.

� For larger project baseline data is not comprehensive.� Monitoring capacity needs improvement.

6.2 Impoverish risk analysis

Defining issues : Prevent/overcome the pattern of impoverishment; identify risk in advance explicitly; make transparent the risk inadvance; implement impoverishment risk model

Conformity Issues to address

� EIA identifies risks � Not mentioned in existing laws.

6.3 Implement Mitigation, Resettlement/ Development Action Plan (MRDAP)

Defining issues : At government and developer level: Ensure MRDAP as a part of the master contract; ensure the signing ofperformance bond; provide other services (land acquisition, road building and health care)

Conformity Issues to address

� EIA is binding to the hydropower developer. The � Not comprehensive for larger projectresettlement plan as outlined in the EIA report is binding to � Some provisions for implementing mitigation plans are in EIAthe developer. report but is not legally mandatory.

� Approved EIA compels the developer to implement the � Resettlement action plan is not mentioned.proposed mitigation measures as mentioned in the report.

� Environmental Management Plan (EMP) and resettlementplan is formulated in the EIA report.

At community and Ensure compensation, resettlement and development entitlements; make schedule ofaffected persons level : entitlement delivery; Finalise institutional arrangement for delivering commitments; enlist

obligation/responsibilities of the concerned parties (as stipulated in contract); prepare recourseprocedures

Conformity Issues to address

� Legal provisions are in place. � Resettlement issue is inadequately addressed and specific timetableto fulfill obligations not mentioned.

� Institutional dysfunction. Successful implementation of ResettlementAction Plan has risks.

6.4 Develop project benefit-sharing mechanism

Defining issues : List out/Identify the types of project benefit; assess the benefits; ensure delivery of project benefit

Conformity Issues to address

� 12 per cent of the royalty from electricity sales to be � Benefit assessment procedure in project designs needs to be clarified andused for the development of the affected district and made more transparent.38 to the region. � Due to proximity to transmission grid, etc. there is a chance of

� Provision of 1 per cent of the royalty to affected VDC for concentration of development in a few districts that will benefitrural electrification. more than others. This issue needs to be addressed by formulating

� Benefits is shared if the project encompasses two or more benefit sharing mechanism.districts.

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6. Ensuring ComplianceThere are five guidelines and twenty-one defining

issues in this strategic priority. Of the five

guidelines, three are addressed by the Nepali

legal documents listed in box 6. The remaining

two guidelines that are not explicitly addressed

through any legal documents include the

establishment of a trust fund and the application of an integrity pact.

Section 13 of the EPA of 1997 provides for monitoring and evaluating the

environmental impacts of external intervention. Section 6 suggests soliciting the opinions

and comments on the project’s EIA report from a team of export. Rule 50 of the EPR of

1997 authorises the Ministry of Population and Environment (MoPE) to maintain an

updated list of persons possessing special knowledge and experience in matters concerning

the environment. Rule 12 states that the proponent has to comply with the matters

mentioned in the EIA report as well as with the conditions prescribed by the concerned

body or the MoPE while implementing its proposal.

Article 17 of the Constitution of 1990 ensures the right to information. Rules 19

(1), (2) and (3) of the Water Resources Regulation, Rules 16 (1), (2) and (3) of the

Electricity Regulations, Rule 4 of the EPR and Guideline 28 of the National EIA guidelines

call for publishing notices in connection with assessing the impact of a proposed project.

Guideline 14 (c) of the National EIA Guidelines goes further and calls for making the data

and information collected by the scoping study public to concerned people and

organisations for their comments.

Guidelines 32 and 34 (c) of the National EIA Guidelines advocate evaluation and

monitoring to ensure that the impact does not exceed legal standards and compliance

monitoring to ensure that the project complies with the low. Guideline 38 deals with

the institutional aspects of effective monitoring. Guideline 27(e) makes provisions for

incorporating the implementation of mitigation measures in a project’s design so that

these measures automatically form a part of the construction and operational phases

of that project. The issues are listed in Table 7.

The Constitution of the Kingdom of Nepal 1990

(Article 16); Environment Protection Act 1997

(Section 6, 12, 13 & 50); Environment Protection

Regulation 1997 (Rule 7, 8,9, 11, 13) and National

EIA guidelines 1993 (Guideline 27, 28, 32, 34 & 38)

Box: 6

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TABLE 7:Ensuring Compliance

7.1 Finalise compliance plan

Defining issues : Ensure compliance plan to follow the applicable laws; conduct independent review of internal processes/commitments; ensure sufficient in-country institutional capacity; ensure funds to secure performance; builtcompliance cost into the plan/project budget/evaluation process; establish performance indicators/ benchmarks

Conformity Issues to address

� Legal provisions are in place. � Not explicitly mentioned in legislation.� EIA guidelines recognise need to build institutional capacity. � Compliance is not independently reviewed.� Approved EIA requires the developer to implement � Implementation and monitoring capacity need improvement.

proposed mitigation measures. � Incomplete indicators for monitoring implementation of compliance plan.� Some EIA reports incorporate details of mitigation plan.

7.2 Establish independent review panel (IRP) for social/environmental matters

Defining issues : Establish project level IRPs; fund IRPs; ensure reporting of IRPs to the national government/regulator; ensuresystematic information distribution to IRPs (by the developer); make all report public; ensure developers responsesto the issues raised (by IRPs); make frequency of IRPs visits flexible

Conformity Issues to address

� A EIA review Committee comprising of independent � Panel members provide pro bono input which impinges on the qualityconsultants, concerned institutions etc. are formed to of analysis.review scoping, ToR and EIA findings. � EIA review panel does not have a say on the environmental

� MOPE is empowered to form a committee for reviewing performance of a project during construction or operation.the EIA reports. � Sometimes a panel is hired by the proponent to review

� EIA report is made public prior to approval by MoPE. report and in return is compensated. Moral hazard issue emerges.� MoPE generally includes suggestions recommended by � Proponents and the government do not disclose the comments made

‘Review Committee’. by reviewer.

7.3 Ensure submission of performance bond

Defining issues : Apply the bond in related activities; make regular review of the level of security

�� No provision of bond or insurance.

7.4 Establish trust fund

Defining issues : Formulate laws for the trust fund; prepare transparent trust deed; appoint independent trustee; define the role of theaffected people

�� No provision for establishing trust fund

7.5 Apply integrity pact

Defining issues : Ensure the compliance of pact with accepted international practices; make provision for institutional capacitybuilding (training, technical assistance etc.)

Conformity Issues to address

� EIA has some provisions regarding the issues. � No institutional mechanism to monitor compliance.

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7. Sharing rivers for peace, development and securityDAD has endorsed the general principles and mechanisms

enshrined in the United Nations Convention on the Law of

Non-Navigational Uses of International Watercourses of 1994.

In doing so, it supported the concept of the river basin as the

primary basis for management, the principle of negotiations

in good faith and the need for harmonising of the policies of

bilateral agencies, multilateral development banks and export credit agencies with

respect to financing projects on shared watercourses. This strategic priority has one

guideline and nine defining issues. No Nepali plans, policies, acts, or regulations address

any of the issues. Provisions concerning shared watercourse is spelled out in specific

treaties. Only two international laws given in box 7 deal with the issues raised under

this strategic priority.

Articles 5 to 26 of the Non-Navigational Uses of International Watercourses

addresses equitable and reasonable utilisation and the participation of watercourse

states. Article 9 deals with the regular exchange of data and information and Articles

11 to 19 deal with prior notification about measures planned for the use of international

watercourses and their waters for purposes other than navigation. Articles 20 to 26 call

for the protection, preservation and management of international watercourses, while

Article 33 deals with the settlement of disputes. Articles IV to VIII of the Helsinki Rules

elaborate the principles of the equitable utilisation of the waters in an international

drainage basin, while Articles XXVI to XXXVII address the procedures for the prevention

and settlement of disputes.

Neither of these internationally accepted provisions for managing trans-boundary

water has been visibly applied to any Indo-Nepal water sharing agreements or practices.

This has become particularly clear in last few years: Nepal is bearing the cost of India’s

unilateral decisions to construct new embankments and renovate old ones along the border.

They include, inter alia the embankments in Laxmanpur, Rasiawal Khurdalotan and Bairganiya

in Bihar downstream of Gaur Bazaar in Rautahat District as well as the issue of Mahalisagar

Dam. These structures have caused drainage congestion and led to inundation of land in

Nepal. India’s recent proposal to link rivers raises new concern about its implications for

developing Himalayan waters. Nepal and India entered into cooperative path of water

development in 1954 with the signing of the Kosi Agreement. In 1996 the treaty on Mahakali

River was signed and ratified by a two-thirds majority of the Nepali parliament is currently

mired in an impasse. Suspicion and mistrust regarding water resource development has

Non-navigational Uses of International

Watercourses 1994 (Article 5-26, 33)

and Helsinki Rules on the Uses of

the Waters of International Rivers

1966 (Article IV-VII, XXVI-XXXVII)

Box: 7

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PUBLIC DISCUSSIONS ON DAMS AND WATER ISSUES

DAD’s guidelines are not alien in the context of Nepal. HMG has put in place certain provisions

that recognise and aim to minimise the negative social and environmental impacts of dam’s

construction. And, thanks to the discourse over the last twelve years, stakeholders felt the

need to begin a dialogue. This scoping study must be viewed in this context.

Water Resources StrategyNepal’s Water Resource Strategy (WRS) of 2002 is a recent attempt that aims to

meet the national goal of significantly improving the living conditions of Nepali

people in a sustainable manner. The WRS has identified water sector activities that

accord importance to its sustainable use, mitigate the impact of natural hazards,

protect the environment, foster economic growth and help evolve constructive

methods to resolve conflicts among communities or countries. The strategy proposes

approaches to fostering economic development using mechanisms that emerge from

broad-based consensus and co-operation. The document identifies ten broad water-

sector issues, which together touch upon many of the issues identified in DAD,

including social, water supply and sanitation, irrigation, hydropower, legal, database,

international, environmental and institutional topics . Sixty-two sub-issues further

elaborate them.9

To meet the national goal the strategy has identified short (5 years) medium-

term (15) and long-term (25 years) targets. This time-bound strategy defines the

following ten strategic outputs:

1. Effective measures to mitigate water-induced disasters are functional.

2. Sustainable management of watersheds and aquatic ecosystems is achieved.

3. Adequate supply of and access to potable water and sanitation and hygiene

awareness is provided.

4. Appropriate and efficient irrigation to support the optimal, sustainable use

of irrigated land is available.

5. Cost-effective hydropower is developed in a sustainable manner.

remained an impediment to friendly relations between the two countries. Both sides have

remained attached to conventional ways of project development and neither has made an

effort to explore alternative ways of co-operating.

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6. The economic use of water by industries and of water bodies by tourism,

fisheries and navigation is optimised.

7. Enhanced water-related information systems are functional.

8. Appropriate legal frameworks are functional.

9. Regional cooperation for substantial mutual benefit is achieved.

10.Appropriate institutional mechanisms for water sector management

are functional.

The activities involved in achieving each output encompass the issues of

� risk,

� vulnerability,

� floodplain management,

� watershed and aquatic ecosystem protection,

� rehabilitation and management,

� compliance and environmental regulations,

� disaster mitigation,

� integration of improved social and environmental mechanisms into hydro

projects,

� local capacity building,

� and equitable mechanisms for cost sharing.

The formulation of the National Water Plan is one of the preconditions for the

implementation of the WRS. It is now in the final stage of preparation.

At this stage it is useful to recount the views expressed by the participants in the

consultative processes conducted during the scoping study. The following sections

summarise the views articulated during consultations with NGOs, in the national

consultative meeting and in the meeting with key government officials.

Views from grassrootsBy bringing together the issues of dams and development, DAD report aims to tackle the

dichotomy of scale, macro vs. micro. In other words it seeks to reconcile the building of a

water project (dam, powerhouse, canals, electric equipment) using technological artefacts

with development, which is embedded in a social context. In Nepal this context is endemic

poverty, low literacy, low development and nascent local capacity, and still evolving political

institutions. Consultations with grassroots NGOs (Annex 3b) during the scoping study

aimed to continue exploring the links between development and dam building. The

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contribution of dam construction to poverty alleviation and some of the barriers that have

to be overcome in the process were identified. Putting in place an appropriate institutional

framework that addressed these issues were seen as continuing to remain a challenge.

Another limitation in Nepal has been that the development discourse has only recently

begun to be contested by alternative perspectives and paradigms. The views expressed

during the interactions were as follows:

� WCD process: Many grassroot groups in Nepal are not aware of the WCD

and its suggestions. The WCD’s five core values are welcome but are too general.

Efforts should be made to define their implications at the local level.

� Flow and access to information: The flow of information about new

projects to the local level generally and to project affected people particularly

is top down. Most of the time, local people do not understand the implications

(costs and benefits) of a project and when they do, it is too late for them to

take corrective measures. Creating stakeholder forum early on at the local and

national levels can help remedy this shortcoming.

� Compliance: There is poor compliance with existing guidelines, laws and policies

during project construction and management. There is no follow ups. There should

be mechanisms to ensure that regulations are followed. To make compliance

effective, stringent criteria such as provision for taking project proponents to court

should be included. Building the capacity for undertaking social auditing at the

local level is critical.

� Participation: Although people’s participation is endorsed by government policies,

project affected people play minimal role in the decision-making process.

Communities on the physical and social margins do not get the opportunity to

participate in any consultations. Sufficient time must be provided for discussing

the benefits and risks of a project before it is implemented. Project-affected people

should be brought to the centre stage when social and economic support is

planned within the existing legal framework.

� Articulation of benefits and costs: Benefits and costs operate at the community,

watershed and national levels. They must be repeatedly discussed at various levels.

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The Larger Community: The National Consultative Meeting

This national-level consultation brought together Nepal’s larger community involved

in dams and development. The day-long meeting was conducted in three stages with a

wider range of stakeholder participation (Participants’ name and their affiliation is

given in Annex 3a). The first session began with a keynote address by the former

Minister for Water Resources, Dipak Gyawali. Honourable member of the National

Planning Commission Dr. Yub Raj Khatiwada also gave his views as chief guest. Dr

Swyambhu Man Amatya, executive secretary of the Water and Energy Commission

Secretariat (WECS) chaired the session.

Following this tone setting, Bikas Pandey, country representative of Winrock International

and Gopal Siwakoti ‘Chintan,’ Coordinator of WAFED, discussed the broader context of WCD

and the processes following the publication of DAD. This presentation was followed by a

brief question and answer period. In the second session, Ajaya Dixit, Director of Nepal Water

Conservation Foundation, presented a summary of the scoping study. Three experts

commented on his presentation; Dr. Janak Lal Karmacharya, Managing Director of NEA;

Purna Prasad Adhikary, President of Independent Power Producers (IPPs) and Hari Roka, a

political commentator. Following the presentation, the floor was opened to discussion. After

this open session, Arun D. Adhikary, a governance specialist at the Netherlands Development

Organisation (SNV) Nepal, provided an overview of the day’s proceedings including his

views on the WCD. Dr. Dwarika N. Dhungel, Director of Institute of Integrated Development

Studies (IIDS) facilitated the discussions.

The following sections summarise the views expressed by the speakers in the first

and the last sessions of the meeting. The views of others in the floor discussions are

presented in a collective format in the sections below.10

Session I

Dipak Gyawali

� Dams are and will be part and parcel of regional and bilateral water

development agreements. Hence, it is necessary to define what constitutes

‘pervasive, serious and long-term impact’ as per Article 126 of Nepal’s

Constitution of 1990 that requires a two-thirds majority sanction from the

parliament for natural resources sharing treaty. A status paper prepared by

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MoWR has proposed nine criteria to give clarity to this constitutional

provision and thus help in the dams and development debate. The proposed

nine criteria help define what constitutes a resource sharing treaty of a

‘pervasive, serious and long-term’ nature that would each trigger the process

of parliamentary approval by a two-thirds instead of a simple majority. The

proposed criteria are:

1. If any hydroelectric project is of capacity greater than 1000 MW,

2. If a proposed water project will require a trans-basin transfer

of water;

3. If the population to be displaced by project is more than 10,000;

4. If a project will affect or submerge more than 25 square kilometres

of agriculture, grazing or forest land.

5. If the foreign to Nepali investment share in a project is more than

80:20 in favor of foreigners.

6. If investors in a project ask for sovereign guarantee for their

investments

7. If there are possibilities of intersectional or cross-sectoral trade-offs

between water and other benefits from a project

8. If more than 50 per cent of the electricity output of a project is to

be exported

9. If, at the point of a river leaving Nepal’s border, an upstream

project’s reservoir will increase the dry season flow by 10 per cent

or reduce the flood peak by 10 per cent.

� Irrigation Policy 2003 and the Community Electricity Distribution Bylaws

of 2003 bring communities and users to the centre stage of the policy

processes and implementation.

� Internal reorganising of the structure of NEA through unbundling of the

distribution centers and bulk purchase through communitised rural

distribution has created incentives to promote efficiency

� Restructuring electricity tariffs will promote efficiency and encourage investors

to invest in dams that produce higher quality energy (i.e. storage).

� Constructive engagement among government, private developers and social

auditors is crucial to prevent the policy process from falling victim to

an impasse.

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Dr Yub Raj Khatiwada

� The recommendations of DAD are important for building dams in Nepal.

� We need a balanced approach to make an appropriate trade-off between

development and environment.

� Both markets and civil society have global reach. Global civil society can

express concern about a national project; this is an important aspect to

consider in our effort to develop dams. At the same time, markets can also

influence government policies.

Dr Swayambhu Man Amatya

� Dams help regulate water so that irrigation, electricity and other benefits

are obtained.

� Dam building should maintain a balance with bio-diversity and forests and

not impair social harmony.

� Nepal should develop its own definition of a large dam.

Hari Bairagi Dahal

� Our challenge is to localise water resource development in Nepal.

Session II

This session included presentations on, comments about and discussion of the earlier

draft of the scoping study report. The issues raised by the commentators and participants

are summarised as follows:

Scoping study report: The report analyses the status of Nepal’s legal

provisions and activities with respect to DAD’s recommendations. The report

did not look into the questions of river tourism or livelihoods. The case studies

of the three-hydropower projects lacked coherence and appeared biased against

government-supported hydropower projects. A comparative analysis of the

policies of funding agencies such as the WB and the ADB must be provided.

DAD guidelines: The recommendations of DAD are generic and need to be

contextualised to meet our specific needs, in other words, ‘Nepalised’. Some

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of the proposed guidelines are complicated and implementing them would

take unnecessary time. The question of looking at alternatives is commendable

but we need to do more homework. DAD suggests a new approach to

developing dams in an inclusive and democratic way. The seventh strategic

priority, sharing river for peace, development and security, is against

the interests of an upper riparian nation. Prior to approval of Power Development

Fund (PDF), the WB had notified Nepal’s riparian nations. The Bank did not

however, inform Nepal when it approved an irrigation sector reform loan to

the Uttar Pradesh government of India. This behaviour was akin to ‘double

standard’ on the part of the WB.

Past efforts: Many past projects have not met their designed objectives. The

much-expected benefits did not trickle down to beneficiaries. A new approach, in

which all stakeholders are involved in decision-making, is needed. But this process

must be designed in such a way to avoid risks of unnecessary extension of time of

project completion. Past river treaties have not benefited Nepal and the time is ripe

for their review.

Livelihood: The planning and development of new dam projects need to

consider the livelihoods of the Majhi, Bote and Raji communities who depend

on rivers. If a project is likely to impact them negatively they must be

appropriately compensated, rehabilitated, and their livelihoods sustained. River

tourism is an important source of income; it also earns foreign exchange for

the country. These aspects must be reflected in planning for water development.

DoED needs to improve its licensing procedure so that it considers water

development in a holistic manner.

Resettlement and compensation: In the past, efforts to resettle and

compensate project affected families were inadequate. Such support should

respond to the livelihood needs of the affected families. The level of awareness

about the hardship project affected families face has increased but more serious

work is necessary.

Basin Approach: While designing two projects under the Community-Managed

Irrigation Sector Project (CMISP), the Department of Irrigation (DOI) has used a

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basin-wide approach. It is expected that this approach will be followed in future

projects as well.

Coordination: Institutional and procedural reform is key. Ministries, government

departments and utilities should improve coordination among themselves. Much

more creative effort is needed.

Role of Civil Society: Civil society members do not favour rules that may stifle

dam building. Their concern is to improve a project’s performance on technical,

social and environmental grounds. Professional societies must play a more active

role in these debates and the voices of civil society should be given logical space in

decision-making processes.

Tariff: Nepali consumers pay one of the highest tariffs in the world. The Electricity

Tariff Fixation Committee (ETAFIC) has been in existence for a few years but its

contribution to policy process is not visible. The process of tariff restructuring

must be transparent and its analytical basis must be made accessible to the

public. This committee must be more visible to consumers.

Continuing dialogue: Nepal’s national dialogue on DAD must continue. WECS

would be an appropriate mechanism to facilitate this process.

Definition of a large dam: Nepal needs to formulate its own definition because

the ICOLD definition is too small for the mountains and too big for the plains.

Session III

This session included a comment on the day’s proceeding by Arun Dhoj Adhikari and

summary by Dr Dwarika Nath Dhungel who facilitated the session.

Arun D Adhikary

� Most dams in the world were conceived in an era when development was

perceived as top down and infrastructure guided. This approach accorded

little emphasis to the human dimension and has not been successful in

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delivering benefits. The efforts of the last 50 years did not link

development to the actual needs of common people, whose condition

did not change nor were people informed about what was planned for

them.

� Development is not only about building a project or pursuing economic

benefits; it also entails promoting social and environmental harmony. It

is not enough for example, to construct a tap in a village: creating the

social environment needed for a dalit to be able to collect water from

that tap is equally important. This approach requires focussing on

empowering communities and building human assets.

� We need new paradigm. DAD needs to be also seen from this perspective.

It suggests an avenue for conceiving water projects within a new paradigm.

� DAD’s five core values, seven strategic priorities and 26 guidelines appear

to be a straightjacket, but one intended to put the state, which is the

major dam builder, in a position of moral responsibility. Members of civil

society can use the guidelines to challenge the government and, in the

process, help build institutions, which minimise negative impacts.

Dr Dwarika N. Dhungel

� Dam builders must learn from past mistakes in order to help minimise

social and environmental impacts while fostering equitable access to

benefits from dam building.

� Public consultations about the role of dams must be held in all parts of

the country not just the capital.

Views from Above: Key Government OfficialsThe scoping study organised a half-day consultation session with key government

officials to solicit their perspectives (Annex 3c). Their views are summarised as follows

� Role of dams: A dam balances the seasonal variations of river flow and

thus helps obtain benefits from water resources development.

� Information sharing: The sharing and communication of information

among government departments must be improved. The Department of

Watershed Management’s work in Kulekhani catchment aims to minimise

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sedimentation in the Kulekhani reservoir. The Department needs to share

information with NEA but has been successful to a limited extent only.

� Past learning: Public discussions of issues related to water, energy

development and natural resource management in the last decade have

contributed to increased understanding but the scoping study did not look

at the forestry sector.

� Aquatic species: Experience shows that fish passages and ladders do not

serve their intended purpose. The dams built so far have negatively affected

aquatic species. Effective measures to mitigate the effect of dams on aquatic

life need to be investigated and implemented. Poaching has also decreased

fish populations in many stretches of rivers. The question of the declining

quality of fishing needs to be considered from a broader perspective.

� Resettlement and rehabilitation: Past efforts at mitigating the social

and economic impacts of dams are inadequately covered in the scoping

study report. The Kulekhani Project, for example, did compensate affected

people. Kali Gandaki ‘A’ provided affected families with compensation and

skill training. According to the NEA, a project cannot be expected to fulfil

the inflated expectations of the affected community.

� Provision of EIA: The implementation of the Environment Protection

Act (EPA) and the Environment Protection Regulation, (EPR) must be

significantly improved. A project some times is conditionally approved even

without conducting an EIA, a practice, which nullifies the spirit of the EIA,

the EPA and the EPR. Due to a lack of clarity in legal provisions, the

proposal of potential hydropower projects located within or adjacent to a

national park have not moved forward. This issue needs serious

consideration through interdepartmental coordination because many good

dam sites are located within parks. By making innovative arrangements, a

dam could be designed to benefit not only the people living there but also

the national park which would in such cases be the recipient of the 10 per

cent royalty from sale of electricity or regulated waters as valued. The

challenge is to balance conservation goals with development.

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� Capacity for Conducting EIAs: The MoPE lacks qualified manpower to

conduct EIAs. This is one reason for the delays in sanctioning EIAs. This

capacity needs to be strengthened.

� Synergy with the National Water Strategy: The issues identified by

Nepal’s WRS are similar to those raised by DAD. One approach envisioned

in the WRS is the formulation of national water plan and basin-level water

resource management. How this concept will influence the sharing of

benefits at the local level needs in-depth analysis.

� Follow up: This dialogue has been useful and should continue in order

to help formulate Nepal’s own guidelines for developing good dams.

The views expressed in the consultative processes indicate the intellectual and

practical challenges to developing and managing water in Nepal in a manner that will

benefit the country and people. The issues identified clearly indicates that many

disciplines and sectors are involved. The questions that they raise are conceptual and

do not have clearcut answers. One analytical approach is based on the common-property,

community-based school of thought, while others rest on organisational theories

underlying the development of governmental and private sector organisations.

Multilateral agencies such as the WB and the ADB emphasise economic instruments,

private sector-based approaches and the reform of governmental agencies.11 The

intellectual context is, as a result, marked by ferment. As a consequence, the balance

between theoretical perspectives on the one hand and the conditions on the ground as

well as development and management needs on the other is often poor. How will an

appropriate institutional approach evolve to address the emerging complex problems

of water and energy development and management? This question does not have a

clear-cut answer nor is simply creating more powerful bureaucratic authorities the way

out. It is a matter involving continuous engagement among government departments,

private sector organisations and civil society groups. Because Nepal is dependent on

external resources for funding its development and dam building, such engagement

also needs to take cognizance of guidelines of funding and other agencies. Each funding

agency has its own set of guidelines, a comparison of which for Nepal’s specific context,

would be useful.

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Guidelines of ADB and the WBBoth WB and ADB have endorsed the five core values and the seven strategic priorities

suggested by DAD. The ADB states, ‘for new hydropower projects, the approach

recommended by the World Commission on Dams will be pursued.’ The WB considers

the WCD’s report to be a major contribution to define the issues associated with

introducing large infrastructure to developing countries and with engaging a wide variety

of stakeholders in the debate over their construction. The WB intends to continue to

work with its borrowers in the effective implementation of its current operational

policies, which the WCD describes as ‘…the most sophisticated set of policies, operational

procedures and guidelines amongst the international donor community.’ The provisions

of ADB and WB are compared in Annex 5.

Every funding agency pursues its own polices in the projects it funds. How Nepal

will reconcile itself to these guidelines could be the subject of a more in-depth study

that is beyond the scope of this one.

Guidelines of IHAAt this stage it is relevant to review the Sustainability Guidelines of the International

Hydropower Association (IHA), which were produced in 2003 in order to promote

greater consideration of environmental, social and economic sustainability in the

assessment of new hydro projects and the management and operation of existing

hydropower schemes. IHA is a member of Dams and Development Forum (DDF) and is

involved in advocating that countries adopt IHA’S guidelines. In March 2004, when

representatives of IHA met then Nepali Prime Minister Surya Bahadur Thapa, they

mentioned its guidelines. The, IHA guideline they suggested, incorporated ‘greater

consideration of environmental, social and economic sustainability in the assessment

of new hydro projects and the management and operation of existing power schemes.’

IHA’s principles of sustainability consist of following five elements.

� Policy framework;

� Evaluation of alternatives and decision making processes;

� Hydropower and environmental management;

� Social sustainability; and

� Economic sustainability

Policy framework: It proposes the concept of eco-efficiency, which includes

three broad objectives for sustainable development: (a) reducing the

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consumption of resources, (b) reducing the impact on nature and (c) increasing

product or service value. Secondly, it also advocates implementing National

Energy Policies, including the Strategic Assessment (SA) process. The IHA also

supports a framework of shared water management policies.

Evaluation of alternatives and decision-making processes: IHA

proposes using ten key criteria to analyse options and eleven criteria to prioritise

those options. The guidelines see EIA as a tool for assessing a broad political,

social and economic context, particularly that surrounding a large hydroelectric

power scheme.

Hydropower and environmental management: IHA identifies ten

issues to use in optimising environmental outcomes for hydropower

schemes. These issues are supplemented by twenty-eight mitigation options/

strategies, which advocate the involvement of local communities, proper

rehabilitation of affected communities and clear and transparent procedure

to meet environmental objectives and sustainability criteria.

Social sustainability: IHA believes that hydropower schemes have the

ability to reduce poverty significantly and to enhance the quality of life of the

affected people. To be socially sustainable, hydro schemes need to recognise

entitlements and share benefits with the directly affected people. The guidelines

recognise that consulting the affected people and the fair and equitable

distribution of project benefits particularly to the affected and vulnerable

communities are two modalities which help achieve social sustainability. IHA

suggests eleven steps in the process of achieving community acceptance.

Economic sustainability: Economic sustainability is a central plank in the

decision-making processes associated with hydropower projects suggested by

IHA. Decisions about economic sustainability are to be based on a comprehensive

evaluation of the resources affected and the project’s costs and benefits, some of

which are difficult to quantify precisely. The guidelines suggest that stakeholders

be identified early in the planning and development approval process and that

their legitimate interests be acknowledged and taken into account in the financial

and economic evaluation process.

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IHA’s guidelines focus on dams for hydropower development while those of DAD

go to the extent of suggesting procedures from rights and risk perspectives.12 The premises

set by both guidelines agree on the need for people’s participation in decision-making,

assessing the alternatives, sharing benefits, ensuring environmental, social and technical

sustainability and upholding the rights of involuntarily displaced people. Like the guidelines

of DAD, IHA‘s suggestions are one more platform for countries to develop country specific

guidelines.

In the next sections we provide observations on each of the seven strategic

priorities proposed by DAD as they apply to Nepal.

COMMENTS ON STRATEGIC PRIORITIES

Gaining public acceptanceWhile legal provisions do incorporate measures enabling communities to participate in

consultations, the challenge is to ensure that the process provides the space for genuine

voices to be heard. How the acceptance expressed will translate into action is a key

question in this regard. The notion of ‘acceptance’ is a relative one and difficult to

measure. A term acceptable to one stakeholder might not be acceptable to another.

Can the decisions of the majority meet the criteria for acceptance? Reconciling local

and national-level acceptance is also necessary. Questions such as who is to define

stakeholders and their representation have not yet been answered.

One of the main concerns in the large dam debate is that the rights of local inhabitants

are often not recognised. They are involuntarily displaced and their livelihoods suffer

when rivers are diverted. In the past, many involuntarily displaced Nepali families were

not socially or economically rehabilitated though their number is lower than elsewhere

in the world. The Kulekhani and Marsyangdi hydropower projects completed in the 1980s

used land or cash and cash only method of compensation, but in subsequent project

there has been a move towards social and economic rehabilitation. The Kali Gandaki A

hydroelectric projects, for example used the Impoverishment Risks and Reconstruction

(IRR) approach comprising eight components: landlessness, joblessness, homelessness,

marginalisation, food insecurity, increased morbidity, loss of access to common property

assets and social disarticulation.13

The limitations of the IRR measures were manifested to different degrees in the case

of the Kali Gandaki Project. In the absence of policies that govern compensation to landowners

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without legal titles some involuntarily displaced families were negatively affected in the

formulation and implementation of resettlement and rehabilitation plans. Appropriate policies

and practices can prevent impoverishment risks from becoming a reality while their absence

exacerbates the risks among families involuntarily displaced by dam construction.

Though project documents claim that rehabilitation activities were successful,

concerns have been raised publicly. This is also true of hydropower projects built by the

private sector, about which stakeholders have expressed similar concerns. These issues

need more in depth analysis than has been possible in this exercise. Nepal has moved up

on the social learning curve compared to ten years ago, but much more needs to be done

so that legal and statutory provisions can successfully deal with the social and economic

aspects of rehabilitating families involuntarily displaced by development projects.

The rights and risks framework aims to institutionalise processes to ensure that

the interests and rights of marginalised groups will not be ignored. Once this premise

is accepted it is up to the state to put in place methods suitable to the context which

facilitate consensus building and solicitation of consent in a transparent and inclusive

way. Consensus cannot be reached instantaneously without sustained effort. Once the

process is begun negotiations can take place. The risks borne by communities become

evident and they can then be compensated in both social and economic terms. Such an

approach can create incentives for dam construction and a new dam project can become

beneficial at both national and local levels.

Conducting a comprehensive options assessmentNepal’s poor development indicator reflects the challenges the government faces in

ensuring that the energy and water needs of Nepali are met reliably, cheaply and fast.

Access to water related service is still unsatisfactory. At this stage, it will be useful to

recount the conditions of three sectors; drinking water, irrigation and energy.

Best estimates indicate that only 71 per cent of the Nepali have access to safe

drinking water. The coverage in the case of basic health, hygiene and sanitation is much

lower.14 Except perhaps for the dam in the Bagmati River at Sundarijal, which meets

part of Kathmandu’s drinking water needs, most drinking water systems in Nepal use

localised sources like springs and streams. Communities in the Tarai and the bhabar

regions use groundwater to meet their domestic water needs.

Although, this study did not make a database for irrigation projects, it is clear

that the structures built by the Department of Irrigation (DoI) do not fall into the

category of large dams. Most structures are weirs and barrages, except perhaps for the

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dam in Begnas Tal, Pokhara. In fact, almost 70 per cent of Nepal’s irrigated area is

served by farmer-built and managed systems, which use temporary brushwood diversions

that do not permanently obstruct or divert flow. Instead, they permit the seepage of

flow and thereby allow downstream users to tap into it for irrigation and other uses.

Dependence on external resources has brought about a concomitant decrease in

the initiative of local communities, who show less interest in managing traditional

irrigation systems than they did earlier. Another challenge is developing mechanisms

for resolving disputes among users. The DoI needs to re-craft its role to meet the

emerging constraints facing irrigation management in Nepal, where modern irrigation

was introduced in 1928.15

Only about 18 per cent of Nepali have access to electricity services from the

national grid. The WRS (2000) envisages that in 2025, 60 per cent of Nepali people

will have access to electricity.16

The issue of assessing options needs to be analysed within this larger context.

While EIA provides a platform to address issues such as water quality, this priority’s

focus is on the planning process through which projects are selected for implementation.

The task ahead is to select a do-able path that makes basic services accessible and

helps analyse the choices available at strategic and practical levels. What mechanism

should be used to make those services available to the people? For water supply and

irrigation sectors, the questions of options are related with institutional issues, not to

the banality that there is no alternative to water. At both the strategic and the practical

levels the questions are related to institutions, prices, and choices of technology.

In the energy sector, the issues also include the source of energy, institutions, and

technology that need to be addressed at both levels. The possible sources of energy are

conventional, which include biomass, agriculture residue, animal waste and biogas

and commercial such as fossil fuels, hydro-electricity, solar, and wind. Demand

management should also be considered where applicable.

The primary source of energy in Nepal is biomass. The use of biogas is popular

and solar panels are being promoted to supply electricity in rural villages. And both

have benefitted from government support in their promotion. In Kathmandu, the use

of solar panels to heat water is widespread. HMG’s Alternative Energy Promotion Centre

provides support for implementing different renewable energy sources, including micro-

hydro. The choice and promotion of a particular type of energy source to meet peoples

needs is an issue that needs to be addressed at a national scale as it is within such

conceptualisations that hydropower must be planned. Hydropower can help Nepal

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reduce the country’s dependence on imported fossil fuels, which are used extensively

for transport and domestic cooking in urban areas. Given this high dependence, it is

imperative that hydropower development be planned accordingly. Continuing reliance

on petroleum-based fuel is unsustainable from the perspectives of expenditure of

convertible currency and of pollution. These issues depend on the process of institutional

changes including the need to consider price signals, incentives for enhancing efficiency,

and organisational innovations.

The next step at the practical level involves selecting optimum projects on the

basis of strategic impact assessments and baseline studies and screening out

inappropriate projects. A multi-criteria decision-making framework has been used in a

few cases to rank and select hydropower and irrigation projects for implementation.

NEA’s Medium Hydro Project employed such a procedure to select hydropower projects

for a feasibility study. Similarly, the NEA prepared the criteria for a Coarse Screening

and Ranking Study to identify and conduct a feasibility study of storage projects. The

criteria are as follows:

� Road length,

� Transmission line length,

� Storage per cent of annual flow,

� Hydrological risk,

� Geological and geo-technical risk,

� Environmental/socio-economical risk,

� Sedimentation risk, and

� Financial risk.

On the basis of the above criteria, 102 storage projects were ranked, and eight

projects were recommended for fine screening. However, the evaluation of the projects

was based only on techno-economic criteria (NEA, 2000). In addition, the DoED has

prepared a standard for making reconnaissance or preliminary, pre-feasibility and

feasibility- level studies of hydropower projects based on their capacity and scheme

type. On the basis of installed capacity, projects are classified into three types: between

1 and 10 MW; between 10 and 100 MW; and higher than 100 MW. On the basis of

scheme type, projects are classified as run-of-river (RoR) or storage. For making

comparisons, the standards include the following parameters:

� Topography,

� Hydrology and sedimentation,

� Geological/geo-technical factors,

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� Construction and seismicity,

� Project configuration,

� Optimisation studies,

� Project design,

� Energy computation and benefit assessment,

� Cost estimate, construction planning and schedule,

� Environmental study,

� Project evaluation, and

� Presentation of drawings, maps and charts.

With regard to environmental and social aspects, the standard refers to the EPA

of 1997, the EPR of 1997 and the amendment of 1998, IEE and EIA. For storage projects,

additional parameters include additional geological studies, reservoir water quality, a

study of resource loss by submergence and a

resettlement study (DoED, 2001). In the mid 1990s a

multi-criteria methodology was also used to select

irrigation projects in the Mid West region of Nepal. Nine

criteria groups (CGs) were decided upon and weightage

given to each according to their perceived relative

importance in achieving sustainable irrigation

development. The criteria groups and their weightage

were as shown in Table 8.17

These methods used in selection, though they

are at a preliminary stage, show that the questions of

distribution of sharing of benefits can be answered to in

an equitable and rational manner, and that the methods are useful. But their use requires

resources. Though a challenge for Nepal, the approach is worth pursuing.

The question of institutions is important, too. Nepal has already initiated some

institutional reforms, one of which is the ‘internal unbundling’ of NEA within the existing

NEA Act. This unbundling has allowed for the establishment of 18 ‘semi-autonomous’

distribution centres covering all the major urban areas of the kingdom. This measure

introduces separate accounting for bulk electricity sold by the grid and retail sales by

distribution centre thereby helping prevent unauthorised consumption. This approach

is useful for reducing loss and to make maximum use of existing facilities. The autonomy

provided to the managers of centres creates incentives for better internal efficiency and

makes addressing local grievances easier than through centrally controlled systems.

TABLE 8:Screening criteria and their weightage

Criteria Groups Weightage (%)

Water resources 18

Land and agriculture resources 16

Engineering 11

Environment 10

Local infrastructure 7

Support services 6

Participation 16

Human condition 11

Economics 5

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The passing of the Community Electricity Distribution Bylaws of 2003 also allows

any organised and registered rural group to buy electricity in bulk from the NEA and

retail it amongst themselves. Groups that invest in their system, get returns from the

tariff to the extent of their investment. The measure is intended to ensure better

accountability, to reduce ‘un-metered’ consumption, and to allow remittances flowing

into Nepal’s rural hinterland from migrant workers abroad to be invested into productive

enterprises. This creates a move towards the ‘communitisation’ of the sector at the

distribution level. The NEA has decided to entrust 25 community-based organisations

with managing and distributing electricity in rural areas. They were selected among 95

applicants from across the country. Out of selected organisations 21 are from areas

with an existing network of electricity; the other four are from new areas that need to

be electrified.18

An issue in the assessment of options is the question of restructuring electricity

tariffs, which is required as a conservation measure designed to discourage consumption

during peak and dry seasons while encouraging use of spill energy during off-peak and

wet seasons. Such a measure is also necessary to balance Nepal’s power system. Tariff

restructuring can also introduce and test the proposition that revenue from a utility

can go up by increasing sales rather than merely by increasing tariff. In April 2003, the

NEA board passed a proposal for restructuring of electricity tariff, which was sent to the

ETAFIC for approval and was to be in force from July 2003. The restructuring has not,

however, happened as the ETAFIC is still debating the proposal.

In the last eight years, nine hydropower projects were implemented: Puwa Khola,

Khimti, Modi Khola, Bhote Kosi, Kali Gandaki ‘A’, Chilime, Piluwa Khola, Indrawati and

Syange. The implementation of these projects demonstrates the various institutional

possibilities for developing hydropower projects. These were facilitated by the 1992

hydropower policy and by the announcement of buying rates in 1997. Nepal’s hydropower

policy terrain is plural and dynamic though substantial improvements are needed to address

the existing constraints and the many second-generation problems that have emerged.

Addressing existing damsHow many dams are there in Nepal and how many of them are large? Using WCD’s

definition, four of Nepal’s hydropower dams fall in to the category of large dams (Table

12 as well as Annex 2). However, since all the dams except Kulekhani are run-of-river

types, this classification cannot apply without qualifications. The issue of coming out

with country’s own definition is discussed further below.

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Of the existing hydropower dams, only two have been rehabilitated: the Trisuli

Devighat projects and the Kulekhani plant after the floods in 1993. The rehabilitation

of existing systems is common practice. Often, the recognition of existing problems

goes a long way in responding to past wrongs and proposing appropriate solutions.

When, in complying with their commitment, implementing agencies improve their

performance and respond to issues previously unaddressed, people’s confidence in

them increases. This process may begin with making public statements, rehabilitating

families, or providing appropriate development assistance. Confidence building makes

it easier to establish the dialogue needed to gain consent for the future. Taking a positive

step, the NEA has recently published a document called ‘NEA Generation’, which includes

technical details about plants currently under its management as well as those it

has proposed. This is a useful beginning in disseminating information. By adding the

social and environmental dimensions of those plants the document would become

more comprehensive and thus serve as a useful stimulus for beginning informed

public dialogues.

In terms of Nepal’s irrigation dams the main issues are operation and maintenance

as well as management to maximise productivity from the water allocated. The new

Irrigation Policy of 2003 has a provision for bringing farmer organisations to the centre

stage of irrigation development and management. The policy suggests measuring

progress in irrigation by the actual amount of water delivered to a specific irrigated

area for a particular crop/season rather than by construction and financial allocation. It

also allows farmer groups to seek compensation from the government if, due to its

negligence or error, they suffer. Bridges between the government and farmers and their

representatives need to be built in order to bring about changes and address the

constraints that the management of irrigation faces.

Sustaining rivers and livelihoodsThe result of significant scientific advances in understanding the relationship between

hydrology and ecosystem integrity is the emphasis placed on environmental flow releases,

which are essential for meeting the needs of downstream users and ecosystems. In many

cases the ecosystem in question sustains fish populations, which form the livelihood

base of certain communities. In the Himalayan rivers, river tourism is an established and

popular economic activity. White water rafting is also a source of employment and foreign

exchange. In Bhote Kosi River, for example, white water rafting generates about US $ 1.7

million revenue annually and employs about one thousand six hundred people.19

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In Nepal the following two broad types of river water diversions are practiced:

a. Upstream diversion of water and its release downstream in the same river

corridor (e.g. Trisuli, Marsyangdi, Kali Gandaki, Bhote Kosi, Sun Kosi, etc.).

b. Water diverted into another river corridor in an adjoining basin (e.g.,

Kulekhani to East Rapti, Jhimruk to Mari, and Khimti to Tama Kosi).

The idea of releasing flow for environmental requirements and downstream users is

not a new concept in Nepal. In the 1996 Integrated Treaty on the Mahakali River there is a

provision for releasing ‘10 m3/s flow as ecosystem needs’ (Article, 1 (2)). Article 7 of the

treaty says, that hydropower use ‘shall not preclude the use of water of the Mahakali River

by local communities living along both sides of the Mahakali River not exceeding five per

cent of the average flow at Pancheswar’. The design of the Kali Gandaki Project provided for

the release of 4 m3/s. The 2001 Hydropower Development Policy also has a provision for

flow release. Article 6.1.1 states ‘an arrangement shall be made for 10 per cent of the

minimum monthly average flow or the amount of water mentioned in EIA study, whichever

is greater to be maintained in the river/rivulet.’

A major difficulty in applying this principle is the lack of understanding of specific

aspects of the interdependence of upstream diversion and downstream ecosystems

and users. The WCD did not have sufficient information with which to make strategic

recommendations. Information is lacking in Nepal, too, though it is known that flow

release is important for downstream users, particularly to operate farmer-built and-

managed irrigation systems. If this need is not acknowledged, it may result in disputes

or livelihoods may be lost. More research into the nature of interdependence will be

needed. We need to investigate existing conditions and prepare baseline assessments.

Once the context is known, the local needs can be made explicit and approaches to

meeting those needs sought in a locally appropriate manner.

Recognising entitlements and sharing benefitsHMG has begun disbursing 10 per cent of the royalties it earns from electricity sales to

affected DDCs as per the Local Self-Governance Act and Regulation. In 2000/2001 sixteen

districts had received NRs, 579,000 under this provision.20 There is also a provision to

provide one per cent of the royalties obtained from electricity sales to affected VDCs to

use for rural electrification. However, this amount has not yet been delivered. An ordinance

was passed in January 2004 amended some existing provisions of the Local Self-

Governance Regulation relating to revenue allocation. According to the new amendment

the concerned District Development Committee that houses the powerhouse shall be

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entitled to the 12 per cent amount to be obtained by HMG for royalty of electricity

production. And 38 per cent of the royalty shall be provided to the concerned

Development Region in which the electricity is produced. The later amount will be

allocated and distributed among the DDCs of the Region as per decisions made by joint

meeting of the Chairpersons or authorised representatives.21 By making this provision,

HMG has recognised the notion of local rights: allocations are a means of operationalising

those rights. This provision can create a basis for helping involuntarily displaced families

if they are made beneficiaries to the shared benefits. Much more work must be done in

order to obtain a conceptual handle on allocating the revenue. To this end, local bodies,

with support from government agencies, local civil society and development practitioners

need to take the initiative in identifying modalities.

At the same time, DDCs, which receive the royalties, need to be supported so that

the amount is invested in a manner which enhances forward and backward linkages.

While turning over some percentage of royalties is a welcome beginning, it also brings to

the fore the question of regional equity a question which has also to be addressed. For

example, how will Tarai districts, which have no geographical scope for building a

hydropower project, benefit or district with no development because there is no grid?

Building the capacity of DDCs to manage revenue is another critical issue. Continuous

engagement among stakeholders is needed in order to come up with acceptable measures.

Whatever provisions are implemented must be monitored and evaluated regularly in

order to bring about improvements. Recognising the entitlements of local regions signifies

a shift from urban bias to an understanding that project development should contribute

to the social and economic upliftment of the region in which a project is located.

The initiative by CARE Nepal, which is implementing a Strengthened Actions

for Governance in Utilisation of Natural Resources (SAGUN) programme, deserves

mention here. The main objective of the programme, which is financed by USAID,

government and non-government partners, is to strengthen the capacity of local

stakeholders (e.g. DDCs, VDCs and CBOs) to deal with the effects of hydropower

development. The programme aims at internalising good governance practices so

that equity in access to and benefits from natural resources (hydropower) is

established, specifically among women, the poor and other disadvantaged groups.

The programme works at the interface between the affected community and the power

developer so that themes such as participation, accountability, transparency and

predictability are internalised in the development of hydro projects for mutual benefit.

The programme is being implemented in three hydropower projects at different stages

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of development. Upper Modi, Kaski District; Middle Marsyangdi, Lamjung District;

and Khimti I, Ramechhap and Dolkha districts are the targeted projects; they are at

the pre-construction, construction and post construction (i.e. operational) stages

respectively. The goal of targeting three projects at different stages of development is

mainly to learn and then cross-fertilize that learning. Winrock International is also

investigating how those who live in upper watersheds could be compensated for the

environmental values they generate. The lessons from both exercises can provide

useful practical tools.

Ensuring complianceEnsuring compliance with existing guidelines and commitments was identified as a

major limitation during the consultative meetings. Participants in the consultative process

spoke of the need to improve compliance. Policies and guidelines identify mechanisms

for promoting compliance, including the use of incentives. Building on these procedures

and introducing greater transparency will further increase the effectiveness of the process.

Ensuring compliance poses a major challenge: much more needs to be done to translate

commitments into actions.

Sharing rivers for peace, development and securityThis strategic priority is limited on two counts. First, the WCD did not review the

ongoing discourses on trans-boundary water debates among the countries of South

Asia, so its analysis is not well informed about the nature of problems here. In fact,

there is only a single reference to trans-boundary water issues in South Asia. In Nepal,

however the inundation of land along the border region due to embankments built in

Uttar Pradesh and Bihar is a major concern. Incidentally, these are not large dams by

ICOLD’s definition, but generally low-height embankments, which have interfered with

natural drainage causing inundation in Nepal.

The second, limitation is that one of the defining issues of the seventh priority

suggested by DAD is biased against upper riparian nation. This defining issue suggests

that riparian nations make prior notification of their plans for trans-boundary rivers.22

This defining issue, which seems in favour of lower riparian countries has serious

implications for the trans-boundary issues in South Asia, particularly for nations in the

upstream like Nepal.

The implication of this issue was seen before the WB approved the loan for PDF,

for which it followed it’s operational guideline 7.5. This guideline states, ‘the beneficiary

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state should formally notify the other riparian of the proposed project. If the borrower

indicated to the bank that it doesn’t wish to do so, normally the Bank itself does so. If

the beneficiary state objects to the Bank doing it, the Bank discontinues processing of

the project.’ The WB had sought to and notified Nepal’s riparian nations as per its

operational guideline. The Bank did not however, inform Nepal when it approved an

irrigation sector reform loan to the Uttar Pradesh government. Both government

and civil society representatives have seriously questioned this role of WB. The other

defining issue included in the seventh strategic priority suggests sharing of information,

which is laudable. But one must recognise the ‘real politics’ involved in trans-boundary

water sharing and though efforts for sharing information between and among riparian

nations continues, it has remained an unachievable goal, whose resolution needs

more creative engagement between and among the different social solidarities of the

riparian nations.

The formulation of the ideal of peace and development is welcome. However, it

falls short of offering modalities for addressing the contentious issue of trans-boundary

water and neither takes cognisance of the context of South Asia.

Sharing trans-boundary rivers is a complex question, which is governed by bilateral

relations, geo-politics and socio-economic realities among and between the concerned

co-riparian countries. This issue requires more in depth analysis than the suggestions

DAD provides. The analysis needs to explore new institutional arrangements for sharing

resources among and between the countries of South Asia so that people’s needs are

met, their lives are made more secure than they are at present, and perceptions of

national security addressed.

IDEAS, DEBATES, CHANGES AND POLICY PROCESSES

The WCD arguably reflects the culmination of the development debates of recent times.

The decade of the 1950s was marked by jubilation over independence in developing

countries, while the 1960s was a period of ‘trickle down’ development. The 1970s

launched participatory discourse and the tumultuous decade of the 1980s ushered in a

major shift in the global geopolitical landscape. The decade of 1990s was remarkable

for two contradictory, trends: the globalisation of the world economy and the information

revolution on the one hand, and the increasing impasse and disputes generally over

development and particularly over water resources development.

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Globally governmental, NGO and multilateral actors involved in these debates

staked their philosophical territories and domains of interest. The debates and the

philosophical positions they related to were not, however, just about the technical,

social and environmental impacts of large dams. Instead, although ostensibly conducted

on the basis of ‘objective’ technical or economic considerations, they reflected

fundamental divisions regarding the perception and nature of development and its

relationship to the structure of society. The differences over dams are, in many ways,

also a proxy debate between two sides. On the one hand are proponents of government

and multi-national market-led approaches to social organisation and development. On

the other are those whose worldviews are rooted in notions of egalitarian, community-

based forms of organisation.23 These debates are inherently political and, it is no surprise

that WCD process was political when it began and continues to be enmeshed in the

politics of development. The debates will continue, but the task before those with

well-meaning intent is to see how common positions can be found.

Debates and discourses, however, do influence, thoughts, ideas, and ‘policy process’

in a nonlinear and indirect sort of way. The preceding discussions on equity, efficiency,

consultative decision-making etc. show this non-linearity. On such principles broad

unanimity exists among various stakeholders. The suggestions of DAD or guidelines by

IHA, WB or ADB, for example, suggest that in future, planning and decision-making can

be improved by drawing lessons from past experience. Such notion of consultation and

participation builds on the Dublin Principles and Agenda 21. Also the ‘rights and risks

based approach suggested by DAD transcends the conventional cost-benefit analysis.

It focuses on sustainability, and urges that options and alternatives be investigated.

These find reflection in Nepal’s acts, rules, regulation, and policies (Table 9).

If there is consensus on the governing principles and values where is the problem?

The disagreement is about DAD’s 26 guidelines. This was also revealed during our

scoping exercise. The following observation by the WB reflects this perspective. The

WB reckons that, if followed literally, the guidelines would make it all but impossible

to build large dams. Other global changes in the aftermath of publishing DAD also

reflect the views of the WB on WCD. This multilateral agency, which was one of the

primary stakeholders in the WCD process, has isolated itself from the guidelines of

DAD, according to The Economist. The magazine has reported that under pressure from

its Indian and Chinese executive directors, the WB’s new water resources strategy

released in February 2003, backs away from DAD.24 The Water Resources Sector Strategy:

Strategic Directions for WB Engagement (2003) states:

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The World Bank has conducted a detailed comparison of the 26 WCD guidelines

vis-à-vis the Bank’s safeguard policies. Although there was much in common,

several important differences existed. First, while there is agreement on the

importance of the rights of affected and indigenous people, in the judgment of

the World Bank, the adoption of the WCD principle of ‘prior informed consent’

amounts to a veto right that would undermine the fundamental right of the State

to make decisions which the State regards as being in the best interest of the

community as a whole. Second, while there is agreement on stimulating good-

faith negotiations on international rivers, World Bank experience (and its policies)

are based on proactive engagement rather than disengagement from countries

who are not already engaged in good faith negotiation with their neighbours on

TABLE 9:Comparison of the Principles of DAD with the Policies of Nepal

Acts, Rules and Regulations

The constitution of the Kingdom of Nepal, 1990

Clause 11: Right to equalityLocal Self Governance Act, 1999 (Part 3)Principle and policies of Local self governance� Devolution of powers, responsibilities, and means

and resources as are required to make local selfgovernance.

� Building and development of institutionalmechanism and functional structure in Local Bodiescapable of considering for local people and bearingresponsibilities.

� Devolution of powers to collect and mobilise suchmeans and resources as are required to dischargethe functions, duties, responsibility andaccountability conferred to the Local Bodies.

� Having the Local Bodies oriented towardsestablishing the civil society based on democraticprocess, transparent practice, publicaccountability, and people's participation, incarrying out the functions devolved on them.

� For the purpose of developing local leadership,arrangement of effective mechanism to make theLocal Body accountable to the people in its ownareas.

� Encouraging the private sector to participate inlocal self-governance in the task of providing basicservices for sustainable development.

Policies

Hydropower Development Policy, 2001

Policy 4.1 : Extension of hydropowerservices to the rural economy from theperspective of socio-equity.

Policy 4.2 : Pursuance of investmentfriendly, clear, simple and transparentprocedures to promote private sectorparticipation in the developmenthydropower.

Water Resources Strategy, 2002Policy principles are guided by integratedWater Resources Management concept,sustainability to ensure conservation,decentralised autonomous and accountablewater services agencies, economicefficiency and social equity, participation ofstakeholders and transparent water sectormanagement.

Kathmandu Valley Strategy on WaterSupply and Sanitation, 2057Make provisions for efficient, effective andequitable service delivery

National Water Supply and SanitationSector Policy, 1998 Policy 4.7:Transparency and consultation

10th Plan (Strategic Policies)

Hydropower Development

Policy 7: To ensure social justicehydro power services will be providedupto the rural economicsPolicy 9: For ensuring domesticconsumption and export, and toincrease the involvement of the privatesector, in the development ofhydropower. simple and transparentprocesses will be adopted.

Water Induced DisasterManagementPolicy 1: To manage water induceddisasters, policies and work plan willbe formulated so that the institutionalcapacity of increased,

Policy 2: To minimise the impact of thewater induced disasters and createawareness among the people, peoplesparticipation/ mobilisation will beensured/increased with consumers

Drinking water and SanitationPolicy 2: Drinking water needs of ruralpopulation will be met through theiractive involvement and participationby making maximum utilisation oflocal resources.

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international waters (as advocated by the WCD). And, third, while there is

agreement on the importance of consultation and public acceptance, experience

suggests that the multi-stage, negotiated approach to project preparation

recommended by the WCD is not practical and would virtually preclude the

construction of any dam.

In the Rio Plus Ten Summit held in Johannesburg, hydropower did not figure as

a renewable resource. The Camdessus report, prepared to cover the issue of financing

the Johannesburg Millennium Development Goals (MDG) barely mentions DAD or its

guidelines. While they reflect the nature of the larger debate, it is worth mentioning

that the WB has endorsed WCD’s five core values and seven strategic priorities.

A number of other international events on water also suggest the need for a more

creative way forward. In March 2003, the Third World Water Forum was held in Japan.

The Water Voice Project Report presented at this forum captures the issues surrounding

water from multidisciplinary, cross-sectoral and multi-faceted perspectives, including

poverty, peace, governance, Integrated Water Resource Management (IWRM), food

and environment, climate, cities, water supply, sanitation, hygiene and pollution, nature

and the environment, agriculture, education and capacity building, floods, energy,

cultural diversity, information, finance, science and technology, management, dams

and sustainable development and public private partnership (PPP).25

Two issues that are important to the dialogue on dams and water are the interface

of water and poverty. The interface is conceived as follows:

1. Poor people do not have access to sufficient clean water.

2. Poor people have no choice but to live on nonproductive land unsuitable

for irrigated agriculture.

3. Water policies are dominated by rich people and hardly benefit the poor

(poor people obtain water at prices higher than those for tap water).

4. Among the poor, women shoulder the burden of most of the unpaid labour

(fetching water, cooking, etc.) and are especially disadvantaged.

In the case of water and energy, the forum had two key observations:

1. An energy source is needed to serve as the driving force in any society

that wants to continue developing. Hydropower can play an important role

as a clean and sustainable source of energy that takes the environment

into consideration.

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2. Dam construction is required for hydroelectric power. Dams have a big impact

on the ecosystems of rivers and river basins and also have a social impact,

especially in terms of causing the migration of large numbers of people.

The measures suggested to address the above-mentioned challenges were as follows:

� Advance sustainable forms of power generation and the debate related to

its practicality

� Advance the debate related to the consolidation of hydroelectric power

generation for the purpose of efficient dam management

The Kyoto statement of the dams theme is also supportive of DAD. Although the Kyoto

statement did not explicitly mention DAD, it endorsed an improved decision-making

process based on the DAD’s five core values and paraphrased most of its strategic priorities.

It is been more than six years since the WCD process began, and almost four

years since WCD published its report in 2000. Today in the new Gregorian century,

new challenges have emerged since 9/11. Other events with a bearing on water resource

development include are the Millennial Development Summit in 2003, the consolidation

of World Trade Organisation, aid fatigue and corporate scandals. These events will

have far reaching consequences on how water is developed and managed and how

dams are built. India’s recent proposal to link rivers is yet another process with serious

implications for water development and management in the Himalayan region. The

ongoing political uncertainty and violence in Nepal are country-specific influences that

demand specifically-tailored attention on the issue of dams and development.

STRATEGIC PRIORITIES: THE BASIS FOR A WAY FORWARD

What do these foregoing conclusions mean for the efforts of developing water resources,

dam building and related policy processes in Nepal? The country is facing enormous

challenges, as one of the least developed countries in the world as measured by modern

economic indicators. The majority of the people do not enjoy access to basic services

like health, drinking water, education, housing, sanitation, employment or a reliable

supply of energy. The country has to harness its water resources so that its people

benefit. In doing so, Nepal must avoid the mistakes that other countries have made; it

needs to develop good and not bad dams. In this endeavour, the government should

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play a key role in creating a suitable framework for action. The question is, what makes

a dam good? No simple, straightforward answer exists but answers must be found.

And one simple answer could be posited thus: water resource development and dam

building in Nepal must maximise benefits for the people and the country while

minimising adverse impacts. WCD, and other platforms can help us begin the process

of answering the above questions not with a prior judgement but in a socially more

engaged fashion.

Since the disagreement is on the 26 guidelines it would be helpful to compare

Nepal’s legal provision with them and their 152 defining issues which further expand

the guidelines. Table 10, which is an indicative comparison of Nepal’s legal provisions

with sixth SPs, shows a semblance of commonality. The seventh priority as mentioned

above is biased in favour of lower riparian, and since it requires deeper analysis, Nepal

need not follow this strategic priority.

TABLE 10:Indicative Comparison of SPs and Legal Provisions

Strategic Priority Key issue Status of Nepali Policies Remarks

Gaining Public Recognise rights, address risks and safeguard Public participation is a accepted Improvement needed as aAcceptance the entitlements of all affected people who are strategy. The procedure is more continuous process

in social and economic margins. A transparent institutionalised in water supply andand inclusive consultation process for irrigation sectors.participation.

Conducting Investigate range of policy, institutional and EPA, EPR and National EIA guidelines, Option assessmentComprehensive technical options providing equal weightage to help identify social and environmental needs to be tackledOptions Assessment social and environmental as well as economic issues at project level. at national level.

and financial aspects.

Addressing Existing Respond to changing circumstances over Past experience is limited. Institutional NEA’s recent publicationDams the project’s life to address outstanding and capabilities need to be enhanced to contains technical details

emerging technical, environmental and suite changing circumstances. of plants. Addition of socialsocial issues. and environmental issues

suggested.

Providing Sustaining Protect and restor ecosystems to foster Some provisions analyse livelihood Assessment of local needsRivers and equitable human development and the welfare issue (EPA, EPR). has to be made at theLivelihoods because livelihoods of local communities planning stage of a

depend on them. project.

Recognising Provide for entitlements at national and Provision of royalty to DDC’s and Need to strengthen theEntitlements/Sharing international levels so that local people (including VDC’s. mechanisms of sharingBenefits directly affected) receive benefits from projects benefits with local and

to improve livelihoods and quality of life. affected people.

Ensuring Compliance Meet commitments and effective actions. Needs to be considerably improved. CBOs and Use’s Groupscan help monitoring.

Sharing Rivers Promote mutual self-interest for co-operation The collaboration is guided by Biased against the upperfor Peace/ through peaceful collaboration. bi-lateral treaties. riparian.Development/Security

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A more specific picture is obtained when a summary of the provisions are compared

with DAD’s defining issues, to provide a basis to judge relevance of the 26 guidelines

(Table 11). To do that, the 143 defining issues* are grouped into the following four

types: a) addressed by legal provisions, b) practiced in Nepal but not mentioned in

legal provisions, c) adaptable in short-term (5-10 years) and d) adaptable in long-term

(10-20 years), as listed in Table 10.26 The table also provides a summary of the status.

In Annex 4, the groping’s relevance is indicated by asterisks. A note on group (b)

would be useful here. This group includes activities that are performed as related to

the defining issues but they are not mentioned in the country’s legal provisions. One

example is the monitoring of reservoir sedimentation. Nepali legal provisions do not

mention that sedimentation rate be monitored but was measured in Kulekhani Reservoir,

till 1998.

Table 11 shows that twenty eight per cent of the 143 defining issues conform

with Nepal’s legal provisions. Forty-eight per cent can be reconciled in the next 5-10

years. Eight per cent of the issues are being carried out even if they are not mentioned

in legal provisions. The remaining 16 per cent issues are of long-term implications and

presently hold only academic importance and can be deferred.

Practiced butnot mentionedin provisions

6

5

1

12

8

TABLE 11:Summary of Defining Issues and Framework for Adaptation

* These nine defining issues not included. Out of 152 defining issues, this study indicates revelance of only 143. The remaining nine issues related to

the strategic priority; Sharing Rivers for Peace, Development and Secutiry, as mentioned earlier, needs more indepth analysis.

** The seventh SP and its 9 defining issues are not included in the comparison

Framework for adaptation

Long-term (10-20 yrs)

16

5

1

1

23

16

Strategic Priorities

Gaining public acceptance

Conducting comprehensiveoption assessments

Addressing existing dams

Sustaining rivers andlivelihoods

Recognising entitlements andsharing benefits

Ensuring compliance

Sharing rivers for peace anddevelopment**

Total

Percent

No. ofguidelines

3

8

2

3

4

5

1

26

No. ofdefining issues

12

49

29

15

17

21

9*

152-9=143

Addressed

6

13

3

5

7

6

40

28

Short-term(5-10 yrs)

6

14

16

10

9

13

68

48

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Nepal’s legal provisions do reflect synergy with the values SPs and DIs suggested

in DAD. In addition, many policy initiatives, which offer new opportunities in water

and energy management and development, have been introduced in Nepal in a pluralised

policy terrain. A foundation to proceed with in preparing the country’s own guidelines

exists. Developing such a guideline is recommended as away forward.

This process can begin by working on the six strategic priorities (SPs), which can

provide a starting point from which discussions about local processes of negotiation

can move forward. Indeed, DAD does emphasise the responsibility of governments for

making the policies and legal frameworks essential for more inclusive decision-making.

Openness on all sides, renunciation of an adversarial approach and promoting dialogue

among all stakeholders form the foundation of the rights and risks-based approach.

The nature of the most appropriate mechanism varies from country to country.27 This

scoping exercise has underscored the necessity of developing Nepal’s own guidelines

to suit local conditions.

This conclusion matches the following comments made by Kader Asmal, the Chair

of the World Commission on Dams, about the DAD guidelines. He has suggested that:

… guidelines offer guidance, not a regulatory framework … they are guidelines

with a small ‘g’ that illustrate best practice and show all nations how they can

move forward. But guide us they should, as they will reduce the risks of all

parties involved.

RECOMMENDATIONS FOR FURTHER ANALYSIS

On the basis of the above discussions, we highlight the following points as issues for

further analysis. These issues are important and will contribute toward making good

dams in Nepal if any.

� Access to information: Information establishes the text about which

perspectives are formed and solutions negotiated. So access to information is

key. It must be remembered, though, that information is not always neutral.

How it is generated and to what end, who controls it and how it is disseminated,

determine the level of analysis and the formation of perspectives. Information

can help a community become aware of the benefits, costs and risks of a project

in terms of their lives, livelihoods and surroundings. It promotes the informed

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dialogue and also helps set the priorities. Most of the community discontent is

a result of too little, partial or plain incorrect flow of information. Though it

needs to be accessible to all, it is of limited value unless it can be interpreted

and analysed in time. The challenge is to institutionalise a process that allows

for the flow of information from the top to the bottom and vice versa.

Information flow to communities must be in a language that they understand.

The existing means of communication must be used, but also improved upon.

� Participatory decision-making and consultation processes: In Nepal,

participatory approaches to implementation are practised in the irrigation and

drinking water sectors. The EPA, the EPR and the National EIA Guidelines

recognise the need for involving people in identifying social, economical and

environmental impacts of new projects. Majority of the participants in the

consultative processes of this scoping exercise suggested that local consultation

processes be more open and inclusive.

Public consultation and hearings are becoming a major part of all projects.

Especially while conducting an EIA, it has been the step, which tries to reflect

the people’s concern about new developmental activities. The process has been

limited, however, on several counts. The level of people’s education and

awareness, the time and season (harvesting and festival) in particular of the

consultation or hearing and the facilitation skills of the people involved have

limited the participation of the community in the process. Yet, the process

must made more inclusive and effective.

Local communities need to be involved not only during the planning and

development phase of a project but also throughout its life cycle. By involving

community members they become not only informed but also accountable.

Informed citizens can help in the timely completion of projects. Conducting

stakeholder forums with representatives from various interest groups (local youth

clubs, women’s groups, mothers’ clubs, community-based organisations, non-

governmental organisations, users committees, federations including VDCs, and

DDCs and national-level government utilities) is one way of enhancing

consultation by broadening its base.

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� Maintaining livelihoods: In many cases, when upstream dams divert water,

communities which live in downstream areas, are affected, some may even lose

their livelihoods. Communities of Bote, Raji and Majhi whose livelihood depends

upon flowing rivers can be seriously affected. Many stretches of Nepal’s rivers are

used for white water rafting, which contributes to the country’s economy and

provides significant employment. Any approach to developing and managing water

must adopt a broad perspective, which takes cognisance of these benefits.

� Acquisition, compensation and rehabilitation: The Constitution of the

Kingdom of Nepal 1990 guarantees some fundamental rights, including property

rights, to citizens. On the other hand, it also empowers the state to acquire

citizen’s land for public welfare without specifying what type of works are

included within the purview of public welfare. The laws used as the main legal

bases for dealing with land acquisition are outdated and are not very sensitive

to the problems of affected families. Transparency and stakeholder participation

in various decisions that have long-term implications for the welfare of project-

affected families is lacking and rehabilitation is often delayed.28

Clear policy statements must be made in order to address the issues of

compensation and rehabilitation. Policy should focus on adequate compensation

of physical and social assets; resettlement, compensation and rehabilitation as

an integral part of project development; integration of a resettled community

into its host community; special attention to women, indigenous and vulnerable

groups; and the establishment of a system of monitoring resettlement activities

before, during and after the payment of compensation. The objective of

compensation must be to ensure that no one is left homeless and without a

means of livelihood after involuntary displacement.

� Monitoring, compliance and social auditing capacity: Improving the

monitoring of and compliance with existing provisions remains a challenge. Several

factors lead to poor monitoring and compliance. Poor information flow, resource

constraints and dependence on an expatriate panel of experts for monitoring have

interfered with the institutionalisation of local capacities. By involving the affected

community in monitoring activities, a new mode of arrangement for compliance

must be explored. Efforts to build local capacity on a long-term basis are needed.

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� Benefits sharing and equity: The objectives of many water resources

projects include contribution to meeting regional development goals, both

within the watershed and outside of it. The notion of regional development

brings out the importance of equity and benefit sharing.29 These objectives

were accorded importance in the past projects. How they can be achieved

and how project can contribute to regional development goals are two new

challenges. New arrangements are in place to share part of the revenue.

HMG/N’s recent initiative to provide 50 per cent of royalties from the sale

of electricity to affected districts is a welcome step. The provision of one

per cent royalty to VDCs for meeting rural electrification objectives is a similar

positive initiative. Two issues emerge important with respect to benefits:

first, that the benefits actually contribute to the well-being of the districts

and VDCs, and second, how they without a hydropower base or generating

capacity or being left out in the hydropower planning process can benefit.

Districts and VDCs that receive benefits will also need support in investing

the income properly for productivity.

� Revisiting legal provisions: Nepal’s EIA guidelines address some critical

issues associated with water and dam projects. Although they provide a

foundation for addressing environmental and social issues, they have no legally

binding status. While the EIA guidelines are encompassing as they cover many

social and environmental issues, the EPA and the EPR are not. They need to be

modified to suit the spirit of EIA. Other acts and rules need to be made coherent

in view of emerging technical, environmental and social concerns.

� Social upliftment programmes (SUP): The EIA process suggests measures

for mitigating the social and environmental impacts of new projects. There are

different modalities of SUP depending upon the donors and the consultants

involved. The challenge is to reconcile the issues of scale and complexity, particularly

in relation to a hydropower dam project. Once approved, a hydropower project

has to be implemented within its own norms, priorities and quality control. The

scale is larger and more complex than the micro context of households. The flip

side of the coin is social impact mitigation and the implementation of a social

upliftment programme within whose micro-scale those impacted at the individual,

household, and local community level are provided with support.

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Such support includes activities related to poverty alleviation, micro enterprise,

education, health and hygiene, drinking water supply, micro irrigation and gender

disparity. How should such support be managed? Should the project that causes

the impact itself implement them directly or should we follow an alternative

way by involving grassroot support organisations? Many such organisation have

already built the analytical tools and the institutional base needed to help

enhance the human capacity to adapt to changes in implementing these tasks.

This question is important. A review of the methods of support used in past

projects can provide the contours of new institutional possibilities.

� Existing water use pattern: Similar lessons can be obtained by studying

the conditions of water users in river stretches where dams have already been

built. Such study should look at social issues, future needs, water quality,

attitudes of the community towards ecology, and how local needs can be met

in an equitable manner. The studies need to look into issues such as performance

of existing systems, periodic review of licensing arrangements, basin-wide

understanding of the functioning of the ecosystem and its link with livelihoods,

and a policy for white water rafting.

� Social learning in the water resources sector after 1990: Since the

restoration of multiparty democracy in 1990 there has been a remarkable

sensitisation among the people about their rights. Similarly, there have been

several reforms in government’s policies in view of the newly liberalised political

environment. The constitution of 1990 guarantees the people the right to

information, the right to organise and form groups and the right to contest the

policy terrain. The democratic space in a pluralised policy terrain in the aftermath

of the liberalised political environment has created incentives that did not exist

prior to 1990. The WRS has, at the very least, captured some elements of the

discussion. The experience after 1990 needs more analysis for the lessons it

holds for discerning institutional innovation in water and energy resources

development and management.

� Implications of international legal instruments: Nepal is a state party

to more than four-dozen international human rights and environmental treaties

and agreements of the United Nations and is a signatory to various related

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declarations and programmes of action. These instruments place many

obligations upon the government of Nepal, which include access to information,

public participation in decision-making, environmental management, social and

economic benefit sharing, ecological conservation and preservation of livelihoods.

Article 9 of the Nepal Treaty Act of 1991 has made further provisions declaring

that respect for and implementation of these international treaties take

precedence over domestic laws. The issue of compliance with relevant strategies

and guidelines can be considered synonymous with the implementation of the

country’s already established international as well as domestic commitments

and obligations. These issues need to be looked into as a follow-up activity in

the process of consultation and engagement.

� Multiple criteria screening: Nepal has already used a multiple criteria

screening methodology in selecting hydropower and irrigation projects. These

methods need to be reviewed and updated. Such investigations are best carried

out by academic institutions as part of their research agenda for

M. Sc. level theses. By rooting analyses in academic rigour the dialogue can be

taken to the next level, where discussions move on to second-generation issues

instead of taking pro–or anti-dam positions. The issue described below is

highlighted to show the significance of one such lesson, particularly related to

the management and technology of dam building in Nepal.

� Technological questions : The development of dams in Nepal also raises

the questions of management and technology. The following conclusions from

an M. Sc. thesis are worth mentioning.30

• The development of hydropower projects needs to focus on management

because of their extended life cycle, cost overruns and delays during

construction. The traditional method of project development based on the

lowest price must be improved upon.

• Geological conditions introduce complexity and are commonly used to justify

the unsatisfactory subsequent cost escalation of projects. A new dimension

to address unforeseen geological conditions in the future is required.

• The existing approach to initiating hydropower projects in Nepal comprises

a number of phases and shows wide variations. There is a need to develop

a common framework and a systematic approach. The lessons learned from

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TABLE 12:Classification of dams in Nepal

* These would be high dams if the 15m height critria is used. But this blanket definition in Nepal’s case is inappropriate and needs changing.

Height (m) Reservoir CapacityS.No. Name of Project (million m3) M3 ́106 Classification Remarks

1 Middle Marsyangdi 62 N/A High* RoR

2 Chilime 3 N/A Low RoR

3 Kali Gandaki ‘A’ 44 7.7 High* RoR

4 Modi Khola 7.5 N/A RoR

5 Puwa Khola N/A Side Intake

6 Upper Bhote Kosi 15 N/A High* RoR

7 Khimti 1 2.5 N/A Low RoR

8 Kulekhani I 114 73.2-83.2 High Storage

9 Kulekhani II N/A Uses tailwater from Kulekhani I10 Marsyangdi 3 gates -13.8 m.

2 gates -14.8m. 6.25 RoR

11 Indrawati III 5 N/A RoR

12 Andhikhola 6 N/A RoR13 Jhimruk 2 N/A Low RoR

the execution of hydropower projects are still beyond the reach of active

stakeholders and the learning experienced in one project does not find

salience in the next.

• Many hydropower project developers bring and use their own technology

and approaches. Experts in construction management need to educate and

help policy makers distinguish the best value for the price including innovative

approaches to managing construction of dams.

� Definition of Large Dams in Nepal: During the consultation, several

participants voiced their concern about ICOLD’s definition of a large dam, as it

does not cater to country-specific conditions. A preliminary database of electricity

generating dams in Nepal has been prepared. It is also necessary to include

irrigation barrages and dams built by DoI in the database, but could not be

completed in this study due to the limitation of time. Much more work needs

to be done to update this list. The database also needs to include structures

that are located along the border and causes inundation in Nepal.

Table 12 shows dams in Nepal classified as per ICOLD’s definition. Except for the

Kulekhani I hydropower project, the application of the same definition to other

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dams in Nepal is untenable. A dam of 5 metres height in the Tarai can be the source

of major adverse social and environmental impacts while a dam of the same height

in the hills may not extend beyond a rivers’ high flood level. This issue of definition

needs a sustained investigation, dialogue, consultation and follow-up activities.

Visits to each dam must be made to validate the parameters. Existing documents,

in many cases, did not differentiate between the total height and the height above

the bed level, for example. This exercise also needs to revisit the basis on which

ICOLD has categorised dam types. Nepal’s engineering colleges and professional

societies can and must play a significant part in the process of proposing a definition.

The government needs to be in a facilitating mode.

CONSTRUCTIVE ENGAGEMENT

Since the WCD process emerged from a situation laced with political undercurrents, it

is not surprising that some governments have seriously questioned the premise of

DAD, while others have endorsed it. HMG’s Ministry of Water Resources did express

concerns about the guidelines of DAD, but did not totally reject them. It is useful to

recount the observation of one of the participants at the WCD consultative meeting

held at the ADB based in Manila. According to Iyer (2003), ‘Nepal, Sri Lanka, …. etc

were more restrained in their language and were prepared to find some merit in the

Report’. In addition, HMG/N has put in place certain legal provisions to address issues

related to the environment and to social spheres before implementing any water

development project. These are encouraging provisions though the effectiveness of

their implementation can and must be improved. Improving implementation continues

to remain a major challenge.

This exercise aimed to engage various stakeholders involved in the processes of

water development in Nepal in suggesting a more inclusive arrangement for the

conceptualisation, design, implementation and operation of water development projects

including dams. While doing so, this report has sought to explore ways of providing

the Nepali people with maximum benefits rather than blindly reject or follow the

recommendations of DAD. The proposals of DAD therefore needs to be viewed in the

context of the parallel global discourse on water, which aims to institutionalise an

inclusive process for its development and management as a whole. With energy

generation using dams as one of its objectives. For example, the Global Water Partnership

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has proposed that addressing water management challenges need ‘a process that

promotes the coordinated development and management of water, land and related

resources, in order to maximise the resultant economic and social welfare in an equitable

manner without compromising the sustainability of vital ecosystems.’ The key words

here are ‘economic and social welfare’, ‘equity’, ‘sustainability and ecosystem’. These

concepts broadly conform to the values and principles of DAD.

Incidentally, these key words are echoed in the principles and statements of various

policies, acts, regulation and plan of HMG/N, thereby implying that the notion of

inclusion is recognised. Whether the language of inclusion had been co-opted to be

politically correct or reflects the State’s genuine concern for its citizens is an issue for

exploration in making constructive linking of water engineering and social issues. Global

discourses do influence national policy processes, and it would be incorrect to suggest

that the keywords are included only for bureaucratic exigencies. The question of social,

economic and political inclusion has been a major issue in post-1990 Nepal. Nepali

scholars and others who study Nepali society and the country’s political evolution

suggest that inclusion in Nepal must be based on the concept of citizens’ rights and on

acceptance of the principle of equality in diversity that was promised in the constitution

of 1990 but has not yet been satisfactorily delivered.31

The public discussions do have some impact. And the response show that

this structural limitation is recognised. The government, headed by Surya Bahadur

Thapa, put forth a social and economic reform agenda before the third round of peace

talks with the Maoists in Nepalgunj on 17 August 2003. The agenda was defined as

follows: ‘build a political system that can accommodate and ensure participation of all

Nepali people, create equal opportunities for self-development of all Nepali people

and to create an egalitarian society bringing an end to all kinds of inequalities,

discrimination and exploitation’. The peace process, however, has been aborted and

the country is going through yet another cycle of violence. Yet, the above statement

points to the need to overcome the impasse in the country and begin changing its

political economy. A systematic analysis and public discussion of the trade-offs inherent

in a system of representative governance that delivers basic needs such as water, energy,

health services, education and livelihoods would go a long way towards building the

middle ground for a new future. Unless questions of representation are addressed and

basic livelihood needs are met, lasting peace is likely to be a mirage: Even though

one insurgency may be quelled, another could as easily arise on the same fertile base

of grievances.

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Although it is not within the scope of this study to analyse political discourses

and how they may or may not have influenced policy instruments related to water

development, it cannot, in its conceptualisation, remain isolated from the country’s

ongoing political context. Limited in its scope though it is, this scoping exercise veers

towards the political context while exploring the rights and risks framework proposed

by DAD. Consequently, the exercise falls between two ends of a continuum: the political,

where the language is that of representation, social and political inclusion and the

instrumental, which focuses on methods for implementing development activities,

including dams. But no project can exist in a vacuum bereft of social and political

contexts. In fact, these very contexts define the contours within which instruments

such as laws and projects must fit in order to achieve the larger goal of national well-

being. Since one informs the other, projects need to be conceptualised within the larger

context, and political dialogues need to take cognisance of the technical, social and

economic realities of developing projects, including dams.

Such a path can balance the questions of representation and delivery while

developing the country’s water resources. Though its landscape is still fuzzy, a middle

development path, where development and conservation are not in contradiction but

are seen as two sides of the same coin, does exist and we believe it is worth pursing. By

bringing together different stakeholders in a consultative and engaging process, this scoping

exercise has sought to identify such a path. Collectively, we explored both the limitations

and opportunities of legal and policy measures vis-à-vis the guidelines proposed by DAD.

As often happens in a consultative exercise, differences, some of which were

irreconcilable, emerged. Because of their roles and orientations, it was natural that

those involved in the dialogue had different views. The divergent viewpoints, in a

typical textbook fashion, fractured along information, interest, and value, common to

environmental resource management debates.32 Some differences in the various

interpretations of information were, by and large, reconciled. Wherever the team did

not agree, it decided to leave the issue and come back to it later, perhaps even under

different circumstances. Those involved in the dialogue broadly agreed on interest:

water development in Nepal must improve the quality of life of the Nepali people and

raise the country’s economy in an equitable and sustainable manner. On some issues

participants espoused different values; they expressed strong views about how the

goals set should be met or how the world ought to be. We overcame these differences

by isolating extreme positions, coming together on common interests and continuing

the engagement.

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IN THE END

This scoping process, which started in January 2003, came to an end more than a year

later, in July 2004, when its summaries in English and Nepali were published. This was

the first ever-sustained multi-stakeholder dialogue on DAD in Nepal. It involved nine

taskforce meetings, one steering committee meeting, one national workshop, one

consultative meeting with key senior government officials and three consultative

meetings with grassroot non-governmental organisations. The processes had good links

with global process and received support from the Dams and Development Project

(DDP). It was a significant exercise for the government, NGOs and the private sector,

all of whom were continuously engaged in the dialogue. Probably for the first time, an

environment was created for ‘constructive engagement’ on issues in and approaches to

developing the country’s water resources. The process has helped improve awareness

of DAD in Nepal while raising international interest.

The dialogue process was seen by all stakeholders as valuable in promoting

understanding of each other’s perspectives. There were clear agreements on the principles

suggested by DAD but views were not uniform on its guidelines. The process has also

shown that there are no extreme positions (pro- or anti at all costs) on dams in Nepal.

There was a general consensus that harnessing the country’s water resources must

contribute to the all-around development of Nepal and the Nepali people and that means

planning and implementing good dams. Guidelines to that end need to be developed on

the basis of the six strategic priorities of DAD, which can be the appropriate platform to

elaborate more detailed recommendations that might strengthen and complete the existing

laws and procedures. This might also be the focus of the next phase.

As with many other developing countries, the approach to water resource

development can never be ‘no dams’ but rather ‘no bad dams’. What would constitute

a good dam that government, private developers and critics can all agree on is what

this particular exercise sought to explore.

This exercise has shown that those involved in water processes are willing

to engage and the engagement has important lessons for Nepal’s larger socio-political realm.

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NOTES

1 WCD uses the definition by International Commission on Large Dams (ICOLD), which is ‘a dam with a height of 15 metres or morefrom the foundation. If dams are between 5-15 metres high and have a reservoir volume of more than 3 million m

3, they are also

classified as large dams.’ In Nepal, the applicability of this defintion is questionable , as discussed later in this report.2 The comments by HMG/N, in Annex 1, covered following issues: The WCD Report in General, Greenhouse Gas Emission,

National Background, Participatory Decision-Making Process, Stakeholders, Options Assessment and Riparian Issues.3 See, JVS (2001) – unpublished (summary of the meeting).4 Dixit (2001) suggests that WCD was an collective compromise to respond to emerging water management challanges.5 This might be an useful set of activities for future graduate students.6 The text does not necessarily incorporate issues detailed in the matrix of comparison. The tables showing conformity and issues

to address in the main text sometimes may appear inconsistent with those mentioned in Annex 4. This is natural as they reflectviews of different team members.

7 Bhattarai (2001) provides details of the directive by the Supreme Court on information disclosure.8 The details are found in Pradhan et al. (2000)9 See, WRS (2002)10 The details are available in the Nepali publication ‘Bandh Ra Bikas Bare Rachanatmak Sambad’ Nepal Water Conservation

Foundation, Kathmandu, July 2004.11 Groups such as the International Association for the Study of Common Property and the Workshop on Political Theory, have

distilled some basic principles from case studies of community-based and other forms of management but these are oftendifficult to apply to regional management needs or contexts characterised by social and economic change. See Moench et al,(2003) for discussions.

12 Some of the more environmental organisations such as the International Rivers Network (IRN) have criticised the IHA guidelines.McCully (2004) states that the IHA’s acceptance of the WCD’s core values and the ‘objectives of the WCD’s strategic priorities’is to be welcomed. However, the sustainability guidelines do not endorse the WCD’s criteria and guidelines for applying thestrategic priorities. By developing their own criteria for applying the values and priorities–criteria which are designed with theinterests of dam builders in mind much more than rivers, dam-affected people or the wider public–the IHA could rendermeaningless the WCD priorities.

13 See, Sapkota (2000).14 This is based on calculations by WaterAid, which has attempted to normalise the data from many different sources. See Newah

(2004)15 For details see Moench et al. (1999)16 The 18 per cent figure is often used by NEA. The MWR presentation at the preconsultation meeting of the Nepal Development

forum (April 2004) mentions the figure as 40 per cent. The 18 per cent figure is based on the fact that of the 8,30,000 electricmeters of the NEA, 8,00,000 are in the domestic category. Assuming all of these are with single independent families andmultiplying by 5.5 as the average family size in Nepal yield a figure of 18 per cent. It is estimated that the approximately 6 MWof offgrid supply probably meets electricity needs of another 5 per cent of the population.

17 The study also included background information for comparison of the fifteen districts of the Mid Western Development Region,and covered the following features: level of past and current support for irrigation development, presence of national parks,population and demographic trends, food deficit/surplus situation, broad irrigation and land use pattern and the number ofschemes that was present in the inventory. See, Euro Consult and East Consult (1994)

18 See, The Himalayan Times November 10, 2003,19 The figure is based on the presentation made by Megh Ale of Nepal River Conservation Trust in the national stakeholders’

workshop on Dams and Development held on 12 September 2003 in Kathmandu.20 See, Upadhyaya (2003)21 See, Finance Ministry’s letter to the Ministry of Local Development dated 2060/10/6 regarding revenue allocation to be obtained

by His Majesty’s Government from electricity production.22 Speakers in a public discussion programme, in Nepal who included former water resources secretaries of HMG, have expressed

serious concerns about this provision. For details see, Pani Satsang (2002)23 This section is based on Moench et al. (2003).24 See, The Economist July 19-26, 200325 Water Voice’ Project Report, March 2003, The Secretariat of the 3rd World Water Forum26 The suggested time frames are normative based on WRS (2000). The WRS used a sequence of 5 (short), 15 (medium) and 25

(long) years but does not specify the basis on which this sequence was selected.27 For details see, Byrd (2002).28 Some people affected by Kulekhani Project still recount the story of injustice. For a recent discussion see Poudel (2004)

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29 This issue has again achieved salience since one of the identified causes feeding maoist violance in the underdeveloped farwest region of Nepal is the grievances that uneven development of the past has failed.

30 See, Pokharel (2002)31 The social and political dimension of ‘inclusive democracy’ was the subject of a conference organised by Social Science Baha

in Kathmandu, 24-26 April 2003. Most of the papers presented at the Conference, which was entitled, ‘The Agenda ofTransformation: Inclusion in Nepali Democracy’ focus on the notion of inclusion. Also see Dixit and Shastry (2003) for adiscussion on state of Nepal’s politics. The issue of choice of technology is found in Gyawali (2003) and Subba (2003) discussesthe challenges of water resource development.

32 These three factors lead to dispute in environment resource sharing and development. The fourth is ideological difference. Fordetailed discussions see Prescoli (1994)

REFERENCES

Byrd, D. 2002: The Role of Dams in Development, International Journal of Water Resources Development, Vol. 18, No. 1,Carfax Publishing, Taylor and Francis Ltd., UK.

Bhattarai, B. 2001: The Right to be informed; A Search for Project Facts in Nepal, Water Nepal, Vol. 8, No. 1/2, NepalWater Conservation Foundation, Kathmandu.

Dixit, A., 2001: Reimagining Water and Dams, Water Nepal, Vol. 8, No. 1/2, Nepal Water Conservation Foundation,Kathmandu.

Dixit, K. and Shastri Ramachandaran (eds.) 2003: State of Nepal, Himal Books, Kathmandu.

DoED (2001): Screening and ranking Study of Small Hydropower Projects (5-10 MW) Kathmandu (unpublished document).

Euro Consult and East Consult, 1994: Preparatory Phase for Irrigation Project (Phase I), Vol. 1, Main Report, June,Netherlands and Kathmandu.

Gyawali, D. 2003: Rivers, Technology and Society: Learning the Lessons of Water Management in Nepal, Zed Books,London and New York.

Iyer, R. 2003: Water Perspectives, Issues, Concerns; Sage Publication, New Delhi.

JVS 2001: Summary of Floor Discussion, Unpublished document.

Moench, M., Dixit, A., Janakarajan, S., Rathore, M. S. and Mudrakartha, S. 2003: The Fluid Mosaic: Water Governance inthe Context of Variability, Uncertainty and Change, NWCF, Kathmandu and ISET, Colorado, USA.

Moench, M., Caspari, E. and Dixit, A. (eds.) 1999: Rethinking the Mosaic–Investigations into Local Water Management,Nepal Water Conservation Foundation, Kathmandu and Institute for Social and Environmental Transition, Boulder.

McCully, P. 2004: Hydropower Group Sidesteps WCD Guidelines; World Rivers Review, Vol. 19, No. 1, February, InternationalRiver Network, Berkeley, USA.

NEWAH, 2004: Committment to Communiy Annual report, Nepal Water for Health, Kathmandu.

Nepal Electricity Authority (NEA), 2000, Identification and Feasibility Study of Storage Project (Main Report), Kathmandu.

Pani Satsang, 2002: Nepal’s Riparian Concerns on Transboundary Waterways, Nepal Water Conservation Foundation,Kathmandu (NWCF).

Poudel, R. H. 2004: Kulekhani, 26 years of Continuous Injustice, Haka-Hakee, Vol. 6, No. 8, February, Kathmandu.

Pokharel, B. B. 2002: Construction Management in Hydropower Projects in Nepal (unpublished thesis), Nepal EngineeringCollege, Kathmandu.

Pradhan, R., Benda-Beckman, F. and Benda-Beckman, K. (eds.) 2000: Water, Land and Law: Changing Rights, to Land andWater in Nepal; FREEDEAL, WAU, EUR; Kathmandu, Wageningen and Rotterdam

Priscoli, J. 1993: Public Involvement Conflict Management and Dispute Resolution in Water Resources and EnvironmentalDecision-Making, Water Nepal, Vol 3 No 2/3, Nepal Water Conservation Foundation, Kathmandu.

Sapkota, N. 2000: Impoverishment Risks and Reconstruction in Kali Gandaki Dam, Nepal; A Working Paper Presented inthe International Conference on Population Resettlement during X World Congress of Rural Sociology organizedby International Rural Sociology Association (IRSA) from 30 July to 5 August 2000 in Rio de Janerio, Brazil.

Subba, B. 2002: Water, Nepal and India, in State of Nepal, Himal Books, Lalitpur.

Upadhyaya, S. K. 2003: How Can Hydropower Royalty Lead to Social Equity and Environmental Justice, Winrock International,Kathmandu.

WRS, 2002: Water Resources Strategy, Water and Energy Commission Secretariat, HMG Nepal.

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ANNEXES

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A N N E X E S70

1. PrefaceOn 16th November 2000 the Final report of the World Commission on Dams (WCD)

was released in London. As promised by the President of the World Bank Mr. Wolfensohn

in the event, the report has now come to the hands of its member countries for their

comments. The WCD consists of 11 commissioners, has established a Secretariat and a

Forum consisting of 50 members. The ICOLD, IHA and ICID are the members of the

forum. At the onset, it will here be worthwhile to note the concern raised by these

institutions on 13th November 2000 stating that only the commissioners and the

secretariat of WCD had been involved in preparing the report, and the forum members

had not been given the opportunity to see or review any of the drafts. In this

circumstance, it would have been more logical to get a common ground for a consensus

of the forum members on the report before it comes to the hands of the member

countries of the World Bank for their review. Nepal has difficulties and hesitation on

expressing her view on a report that has not passed even through the scrutiny of its

limited 50 forum members. It is, therefore, requested that this comment be read in the

same line of aspiration.

It would be pertinent to note the comments of ICOLD on the report dated 30th

November 2000, which has raised a number of valid issues based on practical experiences

that the report is deficient with. Nepal, being one of the member countries of ICOLD,

agrees with the concerns raised by the institution.

2. The WCD Report in GeneralThe WCD report has identified the five core values, equity, efficiency, participatory decision-

making, sustainability and accountability, which provide the essential tests that must be

applied to decisions relating to water and energy development. We appreciate the

emphasis given by WCD on the need of a holistic approach in developing a dam project

with sustainable development concepts and principles, including demand side

management, improvement of system management and watershed management. It is

ANNEX 1

HIS MAJESTY’S GOVERNMENT OF NEPALMINISTRY OF WATER RESOURCES

COMMENTS ON THE WCD REPORT

SUBMITTED TO THE WORLD BANK ON 23RD JANUARY 2001

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A N N E X E S 71

very timely that the lessons learnt from dam building history of the mankind be reviewed

at the advent of the 21st Century to redefine our course of action so as not to repeat the

past mistakes and to minimise the likely adverse effects of the dams to be built in the

years to come. Above all, we appreciate the concern of WCD on the fate of affected

people and the needed protection of their rights. There cannot be any dispute over the

fact that the affected people must be the “ first among the beneficiaries” and they should

be provided with a satisfactory means to maintain and increase their livelihood.

However, the WCD Report seems to be biased towards highlighting the negative

impacts of large dams. The first impression while going through the first few pages

anywhere in the report is that dams are essentially bad projects, and, therefore, the

last resort to opt for, if it all. A more balanced way of putting things together would

have been possible if the report had also given equal weightage to the benefits of dam.

It is feared that, the negative tone towards dams compounded with the

contradictory statements of the facts in the report would create an unprecedented level

of uncertainty and debate on the development process of the dams. In such a situation,

groups with vested interests would be the only ones benefited instead of those people

suffering from hunger, thirst, lack of water, sanitation and electricity. Incidentally, these

people happen to live in those areas of the world where their hopes are still tied up

with water resources development. Apparently, there is every likelihood that the

recommendations of the report would, by and large, be taken as the conditions being

imposed by the haves upon the have-nots.

The so-called knowledge base of WCD is founded on the review of a few hundred

out of the 45,000 or dams so built around the World. This report reviews in depth only

of 8 dams most of which are more than 30 years old and built at a time when the laws

concerning social and environmental impacts were not as rigorous as they are today. Is

there any shift in the approaches in developing the dams in the recent decades? This is

a question, which the report has failed to review. Is the knowledge base of WCD sufficient

enough to enable one to draw a global conclusion on the pros and cons of a dam? We

have reservations on the conclusion of WCD made with such limited information.

3. Greenhouse Gas EmissionWe have noted that the green house emission section of the report takes no account of

the CO2 absorbed by man-made aquatic systems. The advantage of hydropower

development against CO2 emission from fossil fuel fired generation plants has been

ignored by the report. The report did not mention the Kyoto protocol, which favoured

hydropower development on the basis of many valid scientific reasons.

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A N N E X E S72

It is very astonishing to note the dubious emphasis that has been given in the

guidelines to the possible greenhouse gas emission from the reservoir projects on the

ground that some unconfirmed research has indicated so. Is this phenomenon so important

to get a separate section in the guidelines? Why is not the portion incorporate in the

environmental impact study and mitigation program? The underlying intention gives us

enough room to express our doubt on the sanctity of the report.

4. National BackgroundAlthough Nepal has a potential storage and regulating capacity of about 70 billion m3

of water out of the total annual yield potential of 230 billion m3, it has only one

reservoir having a total storage capacity of 83 million m3 (Kulekhani Reservoir). Nepal

has not yet started constructing dams and the experience in the construction, operation

and maintenance of dams is at its infancy. Over the last three decades or so, Nepal has

conducted studies on large dams, which includes 6,400 MW Pancheswar and 10,000

MW Karnali multipurpose projects; and there are numerous other storage projects

identified as technically and economically feasible. At present, the population coverage

of electricity supply is about 15 percent and a large part of the rural population is out

of reach of the boon of the modern technology. Nepal has merely developed a few

hundred megawatts of hydropower out of the total potential of 83,000 MW. The

development of water resources in Nepal has following aspects:

1. Nepal does not have any other means of sizable energy supply, which can be taken

as an alternative to the hydro-electricity. All fossil fuels are imported commodities.

2. About 90 percent of the energy needs are met with sources of organic origin, which

largely includes fuel wood and biomass. With increased energy needs as the

population grows, the depleting forest resources are being stressed to the detriment

of the environment. The only way to reverse this situation is to develop hydropower.

3. The nature of the monsoon rain in the area is highly seasonal characterised by

more than 80 percent of the annual rain occurring during the four months of

June, July, August and September, and the remaining months falling short of

the demand to meet the crop water requirement. All the hydropower projects

built in Nepal except the Kulekhani Project are run-off-river type projects. The

generation capacity is high during the monsoon season with spill energy but is

insufficient to meet the demand during the lean flow season. This situation

essentially calls for storage projects to regulate water and meet the peaking

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A N N E X E S 73

energy demand. The need for such regulation will escalate to meet the demands

of the growing population for more food and electrical energy.

4. With more than 40 percent of the population below the poverty line, Nepal’s economy

is highly dependent on agriculture, the primary occupation of some 85% its

population. Increased agricultural production backed up by reliable year round

irrigation facility is, therefore, essential to poverty alleviation and employment

generation. In the context of the highly seasonal nature of rainfall and the variability

of available water in time and space, this is only possible with dams.

5. Having been deprived of natural resources of significant economic growth potential

other than water, Nepal has viewed the development of its hydropower potential

as the only means of attaining economic prosperity through overall development

and the export of surplus hydro energy to neighbouring countries.

6. When we look the water resources development in sub-regional context, the

development of dams in Nepal is seen as the only means to provide water for

consumptive uses, clean energy and flood control.

Therefore, it is but natural that Nepal look into any issues related to water resources

development with interest. In the mean time, Nepal has also been keen enough to pave

ways to encourage hydropower development. The enactments of the Water Resources

Act 1992, Hydropower Development Policy 1992, Electricity Act 1992, and Environment

Protection Act, 1997 are the milestones in this direction. They have encouraged foreign

investment in hydropower development in recent years. These legal provisions are

consistent with the internationally accepted standards and guidelines.

The Environment Protection Act of Nepal and its regulation require a thorough

study of most of the aspects indicated by the WCD report for a storage project. Nepal

has already begun the processes of public hearings, systematic environmental studies,

ranking and screening of projects based on economic, social and environmental factors

and developing the ones, which pass through the rigorous screening.

5. Participatory Decision Making ProcessThere cannot be any question on the principles set out by United Nations Charter

(1945), the Universal Declaration of Human Right (1947) and the UN Declaration on

the Right to Development (1986). It is true that the definition of the public interest is

shifting from the one placed on the overriding interests of economic growth to the one

that places more weight on the rights and interests of people and communities affected

by a development project. Over the last decade, Nepal has also experienced a similar

Page 83: Constructive Dialogues on Dams and Developments in Nepal

A N N E X E S74

shift in the development process that emphasises beneficiary or affected people’s

participation in a development project right from the planning stage to the operation

and maintenance stage. A review of the processes followed in Nepal beginning with

the construction of the Kulekhani Project in 1981 through the Marsyandi Project in

1989 to the ongoing Kali Gandaki A project expected to be commissioned at the end of

this year clearly shows that Nepal is following most of the guidelines concerning social

and environmental impacts proposed by the WCD Report.

The Environment Protection Act, 1997 and Environment Protection Rules, 1997 of

Nepal require a full-scale environmental impact assessment (EIA) for any development

project including dams. The rules have laid down the procedures starting from the

determination of scope to the finalisation of the study. In each of the steps, consultation

with the affected people is mandatory. Open and pre-informed public hearings are held

during the course of the study. The study must include the in depth analyses of social and

economic, cultural and physical, chemical and biological impacts of the project. The rules

require a proponent to prove with sufficient evidence that other alternatives have been

duly considered before project finalization. The measures to minimise the negative impacts

are required to be elaborated. A complete plan for compensation, relocation and resettlement

of affected people is a must. The provision for an independent body to monitor the

compliance of the rules along with the right to file complaints and the necessary legal

processes have been in place in the Act and the Rules. We are proud to note that we have

been able to adopt these standards of international norms in our development process.

Similarly, the Constitution of the Kingdom of Nepal gives exclusive right to the individuals

to own and utilise the land and the Land Acquisition Act provides detailed procedures for

acquiring the private property giving due respect to the individual’s right.

The WCD Report is very elaborate in setting out the procedures to ensure that the

affected people and the stakeholders are taken into confidence at all the stages of

project formulation. In Nepal’s case, most of the procedures put forward by WCD are

already in place in the form of several acts and rules. Adopting a new set of guidelines

as mentioned in the WCD Report with its contradictory statements and yet to be polished

prescriptions, would create confusion and chaos.

Our concern is also attracted towards the WCD Report’s suggestion to review the

terms of license every 5 years or so along with public consultation; the terms, among

others, include sharing of the benefits. This suggestion, if adopted, will increase the

risk viewed from the part of the investor and it is likely that no investor will come

forward to finance any project under such terms. This would be counterproductive to

Page 84: Constructive Dialogues on Dams and Developments in Nepal

A N N E X E S 75

the notion of the privatisation drive that is taking place in the hydropower sector in

Nepal and other developing countries and, hence, unacceptable.

6. StakeholdersThe WCD Report recognises the following facts:

“ .... a process that is too complex can needlessly delay decisions and deprive

potential beneficiaries of the fruits of any of the development alternatives under

consideration. The goal must be a process that gives all key stakeholders a voice and a

full opportunity to participate in the decision-making, seeks the broader reasonable

consensus, and is transparent in the criteria used for reaching a decision. Such a process

is likely to ensure the demonstrable public acceptance that projects require if they are to

achieve development. However, no process will work unless all the parties enter the

negotiation in the good faith. Without this there is a danger that any attempt to make

the process more inclusive will end up being a recipe for stalemate, putting the

achievement of needed benefits at risk.”

The WCD Report is not clear in defining the stakeholders. It has left the matter

open-ended implying that any one interested could be a stakeholder. The report further

remains silent on who has the authority to decide the list of stakeholders. We believe

that this gives ample playground for the so-called anti-project activists with vested interests

to attempt to abort a genuinely benign project in the name of safeguarding stakeholder

interest. The WCD report is ambivalent on who should represent the stakeholders to

enter into negotiation and sign an agreement.

Nepal is of the view that the cumbersome nature of the negotiation process suggested

by WCD will stall any new development projects. Developing country like Nepal cannot

simply afford the cost of such a rigorous process. As a result, we fear that the recommendations

of the WCD report, apparently intending to make the process more inclusive will end up

being a recipe for stalemate, putting the achievement of needed benefits at risk.

Nepal has a democratically elected legislative body, which represents and speaks

the voice of the people. There are also locally elected bodies empowered sufficiently by

the Local Self Governance Act with decision making powers to speak up on behalf of the

project affected people, like the Village Development Committees and District

Development Committees. In fact the Environment Protection Act and Rules require the

written consent of these local bodies regarding the project before the environmental

study is finalised and approved. Our concern on the WCD report lies on the over played

emphasis given to the stakeholders.

Page 85: Constructive Dialogues on Dams and Developments in Nepal

A N N E X E S76

Nepal is of the opinion that the matter of stakeholder consultation is country and

location specific and should not be globalised in the manner suggested by the WCD

guidelines; rather, it should be taken care of by the rules and acts of the individual

nations as per their local condition. On the other hand, Nepal believes in the fact that

the consultation with the stakeholders, particularly the project-affected people, is key

to the smooth completion and operation of a project.

7. Options AssessmentThe WCD report has suggested that for each dam project, assessment of all policy,

institutional, management and technical options should be reviewed. In our context,

this process is not justified. On the contrary the dam project should be an outcome of

the national policy and programmes. Nepal has already initiated the formulation of the

National Water Resources Strategy with a vision of overall water resources development

over a period of 25 years. The strategy formulation is being done with assistance from

the World Bank. A lot of public consultation at various levels, national, regional, donor

agencies and line ministries are being sought at different stages of the process. The

National Water Resources Strategy (NWRS) will guide the nation with the necessary

options for consumptive use as well as for generation of power using Nepal’s abundant

water resources.

The WCD report has put forward the concept of demand side management and

supply side management as alternatives to possible dams. We believe these alternatives

together with those of available renewable energy alternatives cannot replace dams for

meeting growing demand of water and energy, especially in the case of a country like

Nepal and the sub-region.

8. Riparian IssuesThe relationship between the principle of equitable utilisation and no significant harm

is not clear in the WCD Report. This is admitted by the report itself. The relationship

between these two principles was a matter of great debate when the draft convention

on the law of non-navigational uses of international watercourses was discussed in the

working group. The requirement of the consent of riparian states may be practicable

provided that the level of development is similar in the riparian countries. When there

are disparities, the requirement of consent will preclude the development of dams in

the less developed riparian country. Further, the consent required even in the case of

non-consumptive uses makes little sense.

Page 86: Constructive Dialogues on Dams and Developments in Nepal

A N N E X E S 77

The principle that dams on shared rivers should not be built and the external

financial agencies should not be involved in projects where riparian states raise objections

is unjustifiable for reasons that this again applies unequally in the case of a relatively

less developed and asymmetrically placed riparian state. The riparian that has already

developed shared water courses for its need will easily object to such a new development.

So far as the question of an independent panel is concerned, this would result in an

agonizingly protracted process of consultation, investigation and finalisation for the

panel prior to the preparation of its final report. This would further disadvantage the

state that is already behind the race for development.

The WCD Report, in its guideline, recommends that if a project has significant impacts

on other riparian states, prior notification should be made at various stages of project

development. This concept may be agreeable only if it is applied on a reciprocal basis and

the concerned riparian states are at an equal level of development as mentioned earlier. In

Nepal’s context, it has already suffered because of non-notification by its southern neighbour

on the use of water from some trans-boundary rivers. Such a notification requirement

proposed by the WCD report would hamper Nepal’s power and irrigation development.

9. ConclusionThe WCD report states, “ the report is not intended as a blueprint. We recommend

that it be used as the starting point for discussions, debates,...”. In the same line we

believe that the report has started a wide debate on dams, which would consolidate our

philosophy on development based on dams in the future. Such a report and its

recommendations cannot be adopted as guidelines in the present form till the debate

takes some definitive shape.

There was a workshop held on 10th January 2001 organised jointly by the Nepal

Chapter of ICID, Nepal Chapter of ICOLD, Jalsrot Vikas Sanstha and Nepal Hydropower

Association, which was participated by more than 60 eminent persons. There was a

general consensus on the workshop that WCD guidelines in the present form cannot be

implemented, especially in the context of a LDC like Nepal.

Nepal has strong reservations on the globalisation/ generalisation of the key issues

that are location specific and are to be viewed in the perspective of the rules and

regulations of the individual nation against the one suggested by WCD.

Similarly, the riparian issue as simply and straightforwardly put by WCD, is a complex

one needing more in depth thought in the light of the geo-political and socio-economic

realities prevailing in the concerned riparian countries of the region.

Page 87: Constructive Dialogues on Dams and Developments in Nepal

2

3

4

5

67

8

9

10

11

12

13

14

S. No.

1

Details

Name

Inventory of electricity generating dams

Locationa) Riverb) Basinc) District

d) VDC

Function(s)a) Primaryb) Secondary

Technical detailsa) Typeb) Height of Dam/Weirc) Length of Dam/Weird) Rated heade) Rated Dischargef) Catchment areag) Mean annual flowh) Minimum annual flowi) Maximum annual flowj) Backwater fetchk) Total storagel) Dead storagem) Diverted flow for DWS/Irrigation

n) Environmental flowo) Provision for migratory

fishesCommand area

p) Grossq) Net

Power generationr) Installed capacitys) Firm capacityt) Load factoru) Annual Energy Generation

Constructiona) Started onb) Completed/

commissioned onEIAInundation

a) Surface area of reservoirb) Total Land Area

No. of people displaced

Total Project Cost

Promoters / developers

Ownership/Operation/Managenment

Financing agency (ies)

Consultants

Contractors

Unit 1

Middle MarsyangdiHydroelectric

Project

2

ChilimeHydropower

Project

3

Kali Gandaki ‘A’Hydroelectric

Project

4

Modi KholaHydroelectric Project

5

Ilam(Puwa Khola)Hydropower

Project

6

Upper BhoteKosiHydroelectric

Project

7

Khimti 1HydroPower

Project

8

Second KulekhaniHydroelecric Powe

Project

(m)(m)(m)(m3/s)(Km2)(m3/s)

(Mm3)

(MW)

(GWh)

(Ha)

Family

CroresRs.Mill ionUS$

MarsyangdiGandakLamjung

Faliyasanghu, Udipur,Siudibar, Bhoteodar

HydropowerNone

RoR62959880

272924.8

NoneNone

NoneNone

70

398

2001Ongoing

Yes

14.47

65 families

1365

NEA

NEA

KFW, NEA

Fichtner JointVenture, EIA: TAEC-NESS J/V

Civil works:Dywidag-Dragados-CWE JV (DDC JV);

Mechanical Equipment:Voith SiemensHydropower GenerationGmbH & Co;

GIS Switchgearequipment Substationswitchyard: ALSTOMEnergietechnikGmbH

Electrical Equipment:ALSTOM powergeneration AG;Hydroelectric Steel

Structure Equipment:VA TACH HydroGmbH Co. of Austria

Chilime KholaBhoteKosi, Trisuli

Rasua

HydropowerNone

RoR3

133527.5274

NoneNone

NoneNone

20

137

Yes

232.32

30.98

Chilime Hydropower

Co. Ltd.

Chilime Hydropower

Co. Ltd.

Karmachari Sanchay

Kosh, NEA, Chilime

Hydropower Co. Ltd.,

Hydro-mechanicalworks: ChinaGezhoubaConstructionGroup CorporationFor WaterResources andHydropower.

Kali GandakiGandakSyangja

HydropowerNone

RoR44

105115

133.87618288

7.7

Nonem3/s

NoneNone

144

842

Yes

65

18 families

NEA

NEA

ADB, OECF, NEA

Morrison Knudsen

International (MKI),

USA ; Norconsult

International, Norway;

IVO International,

Finland

Civil works:Impregilo spA,Italy;

Hydaraulic SteelWorks: NoellStahl, Germany;

Electrical Works:Mitsui/ Toshiba/Alstom J/V;

MechanicalWorks: Mitsui/Toshiba J/V ;

Transmissionlines and SubStations: TATA/Marubeni J/V.

Modi KholaKali Gandaki

Parbat

Deupur

HydropowerNone

RoR7.5336725

510

00

NoneNone

NoneNone

14.8

92.5

19962000

Yes

00

3 families

30

NEA

NEA

HMG, NEA, Import/Export Bank (EDFC),Korea

Saman Engineering Consultants CO.LTD., Republic of Korea; In collaborationwith Water Resources Consults (P) Ltd.,Nepal

Office and Staff Quarters: MuktinathNirman Sewa (Pvt.) Ltd., and NeesaNirman Sewa Joint Venture;

Headworks: China International Water andElectric Corporation, China ; JayeeConstruction (P) Ltd., Nepal; and B.T.Nirman Sewa (P) Ltd., Nepal Joint Venture;

Tunnel and Surge Tank: Himal Hydro & GeneralConstruction Ltd., Nepal; and Statkraft AnleggAS, Norway Joint Venture ( HH & SA J/V)

Power House, Tailrace, Switch yard andpenstock: China National WaterResources& Hydropower EngineeringCorporation, China; and ShresthaConstruction Co. Ltd., Nepal JointVenture (CWHEC/SCC J/V);

Electro-Mechanical Works and 132 kVTransmission Line including SubstationWorks: Hyundai Engineering Co. Ltd., inCollaboration with Hyundai Corporation,Republic of Korea.

Puwa KholaMai Basin

Ilam (Puwa Khola)

Hydropower Project

HydropowerNone

RoRSide IntakeSide Intake

3042.5

125.1

00

NoneNone

NoneNone

6.2

48

19951999

Yes

00

2 families

15.7

NEA

NEA

NEA

IHPP/NEA

Civil Works:CWHEC-LaxmiJ/V;

Hydro-Mechanicalworks: NepalHydro & ElectroCo. (NHE) ,Butwal;

Electro-mechanicalworks:DongfangElectric Co.(DEC), PRChina.

Bhote KosiSun Kosi

Sindhupalchowk

HydropowerNone

RoR1560

13436.8213266.4

45

246

2001

Yes

Bhote KosiPower Co.

Bhote KosiPower Co.

Panda Energy,Harze, HIPC,and IFC-MGN

KhimtiTama KosiDolakha,

Ramechhap

HydropowerNone

RoR2.5

6602.1535831.5

60

350

19932001

Yes

140

Himal PowersLimited

Himal PowersLimited

ADB, IFC,NORAD,

EKSPORTFINANSStattkraftAnlegg AS,BPCHydroconsult

Civil works:Himal Hydro &generalconstruction,StattkraftAnlegg AS;

ElectricalEquipments:ABB, Norway;

MechanicalEquipments:Kvaner,Norway.

Kulekhani, ManduRapti

HydropowerNone

Storage

284.113.3

32

104.6

19821986

Yes

124

NEA

NEA

HMG, IDA, KF,OPEC, UNDP, EEC

Nippon Co-e, Japa

Civil works:Hazama Gumilimited, Japan;

Gate valve &Penstock: ChinaInternational Waterand ElectricCorporation, PR ofChina;

GeneratingEquipment & SubStation: Fuji elctriccompany, Japan.;132 kV

Transmission line:Richardson &Kudas ltd., India.

The inventory is not exhaustive. It can be used as a template for preparing a more elaborate inventory in the future.

ANNEX 2 78

Page 88: Constructive Dialogues on Dams and Developments in Nepal

r

9

KulekhaniHydroelecric

Power Project

10

Marsyangdi Hydropower Project

11

Mailun KholaHydropower

Project

12

Upper ModiHydroelectricity

Project

13

Indrawati ThirdHydroelectric

Project

14

AaandhikholaProject

15

Jhimruk Hydroelectric andElectrification Project

16

TrisuliHydropower

Project

17

GandakHydroElectric

Project

18

SunkosiHydropower

Project

n.

HydropowerNone

Storage114

60

211

19771982

Yes

500 households,

3,000 people

117.843

NEA

NEA

HMG, IDA, KF,OPEC, UNDP,

EECNipponCo-e,JapanSimcointernational

Dam,Tunnel, U/G powerhouse& otherconstruction:Sambuconstruction,Korea.

Marsyangdi riverGandaki Basin

Tanahun

Aanboo Khaireni

HydropowerNone

RoR3 gates-13.8 m. ; 2 gates 14.8 m.

1029596

3850210

6.25

NoneNone

2 gated openings of width 16 meach and height 15.8m

NoneNone

69

462.5

1985/861989

No

62

222 households, 1,776 people

221.57

NEA

NEA

NEA,IDA, KFW, SFD, KAFEDand ADB

Lahmeyer International gmbH,Frankfurt (Main) Federal Republicof Germany in Association withSnowy Mountains EngineeringCorporation (SMEC), Coorma,N.S.W., AustraliaHeadworks: KDC-HD, KoreaDevelopment Corporation-Hyundai Engineering & constr.Co. Ltd. Korea (ROK);

Waterways and power house:TAISEI-CWE, Japan, ChinaInternational Water & ElectricalCorporation, China (PRC) ;

Hydraulic Steel Structures:COSMAR-Krupp-Noell- Thryssen,Federal Republic of Germany;

Mechanical Equipment:J.M.VOITH, Federal Republic ofGermany;

Electrical Equipment: SiemensAG,Federal Republic of Germany;

Transmission Lines: SAE, India;

Switchyards and Substations:AEG, Federal Republic ofGermany

Mailun KholaTrisuli

Rasuwa

Haku, Dandagaon

Hydropower

RoR2.520

3701.6835.1

0.66

0.1

5

38.38

2002

IEE Done

6 Families

584.5

Molnia PowerPvt, Ltd.

Molnia PowerPvt, Ltd.

-

ModiKali-Gandaki

Kaski

Lumle, Dansing,Aslyan, Ghandruk

Hydropower

RoR10309417

385

0.038

0.5

14

91.2

9513

24 Families

27.9

GITEC Nepal (P) Ltd.

GITEC Nepal (P) Ltd.

-

IndrawatiSun Kosi

Sindhupalchowk

Jyamire

HydropowerNone

RoR5

6263

17.3437

NoneNone

7.5

51

1999Ongoing, Final Stage

Yes

National HydropowerCompany Ltd.

Natonal HydropowerCompany Ltd.

-

Aaandhi KholaGandakSyangja

Galyang

HydropowerNone

RoR6

602382.74441.4

NoneNone

5.1

35

19821991

55.3

-

BPC Hydroconsults

Civil works: HimalHydro and GeneralConstruction.

ElectromechanicalEquipments: NepalHydro and electrocompany, Butwal.

Jhimruk KholaRapti

Pyuthan

HydropowerNone

RoR2

205210

76453.2

Under StudyUnder StudyUnder Study

5 ha under studyNone

12

72

19891994

55.3

Butwal Power Company

NORAD, UMN

-

Butwal Power CompanyHydroconsult

Civil works: Himal Hydro andGeneral Construction;

Electro-MechanicalEquipments: Nepal Hydroand Electro Company,Butwal

Trisuli

Nuwakot

Trisuli Bazar

HydropowerNone

RoR

15054

45.3

0.283

24

117.646

1966

20

NEA

GoI,HMG

NarayaniGandaki

Nawalparasi, Nepal &

Bihar,India

IrrigationHydropower

6.09

15

0.046

17

Government ofBihar, India/

NepalRiver ValleyProjects, Dept.GoB, India andIrrigation Dept.GoB

SunkosiKosi

Sindhupalchok

HydropowerNone

RoR

30.539.9

0.067

10.05

70

19681972

10.94

NEA

NEA

PR of China,HMG

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A N N E X E S80

Page 90: Constructive Dialogues on Dams and Developments in Nepal

A N N E X E S 81

Name of Participant Organisation

Government offices

Ms. Annu Rajbhandari Nepal Electricity Authority

Mr. Anup K. Upadhyaya Department of Electricity Development

Dr. B.L. Manandhar Department of Hydrology Meteorology

Mr. Bhoj Raj Regmi Nepal Electricity Authority

Mr. Bikash Chand Shrestha Directorate of Fishery Development

Mr. D.B. Singh Department of Electricity Development

Mr. Damodar Bhattarai Department of Water Induced Disaster Prevention

Dr. Janak Lal Karmacharya Nepal Electricity Authority

Dr. Kul Ratna Bhurtel Water and Energy Commission Secretariat

Mr. Mohan Ratna Shayka Nepal Electricity Authority

Mr. Shital Babu Regmee Department of Water Induced Disaster Prevention

Mr. Shiv K. Sharma Ministry of Water Resources

Mr. Shiv Kumar Basnet Ministry of Water Resources

Mr. Shiva Chandra Jha Nepal Electricity Authority

Mr. Surya Pandey Dept. of National Parks and Wildlife Conservation

Mr. Sushil Prasad Pradhan Pancheswor Multipurpose Project

Dr. Swoyambhu Man Amatya Water and Energy Commission Secretariat

Dr. Yubraj Khatiwada National Planning Commission

Community based organisations

Mr. Bed Prakash Kali Gandaki A

Mr. Chhatra Bdr. Karki Khimti Hydropower Users Group

Mr. Dhan Bahadur Majhi Nepal Majhi Utthan Sangh

Mr. Hari Rana Khimti Hydropower Users Group

Ms. Kalpana Kumal Nepal Federation of Nationalities

Mr. Madhu Dumre AKWUA

Mr. Padam AKWUA

Mr. Padam Prasad Aryal NFIWUAN

ANNEX 3 (A)

NATIONAL STAKEHOLDERS’ WORKSHOP ONDAMS AND DEVELOPMENT

12 SEPTEMBER 2003, KATHMANDU

Page 91: Constructive Dialogues on Dams and Developments in Nepal

A N N E X E S82

Name of Participant Organisation

Ms. Shakuntala Nagarkoti FECOFUN

Mr. Shanti Prasad Paudel Khimti Hydropower Users Group

Mr. Tika Ram Dahal NFIWUAN

Non-Governmental organisations

Mr. Ajaya Dixit Nepal Water Conservation Foundation

Mr. Ananda Prasad Shrestha NEFAS

Mr Anil Pokharel NEWAH

Mr. C.N. Pandey Nepal Engineering Association

Dr. Dipak Gyawali Nepal Water Conservation Foundation

Mr. Dwarika Nath Dhungel IIDS

Mr. Gajendra B.J. Chettri Nepal Centre for Riverine Life

Mr. Gopal Siwakoti ‘Chintan’ Water and Energy Users’ Federation-Nepal

Mr. Hari Bairagee Dahal Small Hydropower Development Association

Mr. Ishwar Onta Jalsrot Vikas Sanstha (JVS)

Ms. Meena Joshi King Mahendra Trust for Nature Conservation

Mr. Megh Ale Nepal River Conservation Trust

Mr. Narayan Pd. Chaulagain Water and Energy Users’ Federation-Nepal

Mr. P P Adhikari NHA

Mr. P.L. Joshi FRD

Mr. Pradeep Adhikari Nepal Water Conservation Foundation

Ms Rakshya Thapa Nepal Water Conservation Foundation

Mr. Rudra Sapkota Association of DDC Nepal

Mr. Shiva Bisangkhe Nepal Water Conservation Foundation

International non-governmental organisations

Mr. Bikash Pandey Winrock International

Mr. Dhruba Pant International Water Management Institute

Ms Lisa Singh UNDP

Mr. Shyam Upadhyaya Winrock International

Ms Neera Pradhan IUCN

Ms. Rakita Singh IRG

Mr. Ratna Sansar Shrestha Winrock International

Prof. S.R. ChaliseICIMOD

Mr Sameer Karki IUCN

Dr. Stefan Gorzula IRG

Page 92: Constructive Dialogues on Dams and Developments in Nepal

A N N E X E S 83

Name of Participant Organisation

Bi-lateral agencies

Mr. Arun Dhoj Adhikari SNV Nepal

Mr. Jaypal Shrestha U.S. Embassy

Mr. Narendra K. Gurung JICA

Multi-lateral agencies

Mr. Nogendra Sapkota Asian Development Bank

Ms Neeta Pokharel Asian Development Bank

Media

Mr. Abdullah Miya Rajdhani Dainik

Mr. Anil Giri The Annapurna Post

Mr. Bikash Thapa Kantipur Daily

Mr. Bishnu Budhathoki The Rising Nepal

Mr. Dina Mani Pokhrel Radio Sagarmatha

Mr. Kedarshree Joshi Janaprabhat weekly

Mr. Kiran Pokhrel Radio Sagarmatha

Mr. Santosh Neupane Image Metro T.V.

Mr. Sharad Chirag Nepal Samacharpatra

Mr. Shree Ram Subedi The Himalayan Times

Mr. Suman Malla The Kathmandu Post

Mr. Tula N. Shah Space-Time Dainik

Educational Institutes

Mr. Dipak Bhattarai Nepal Engineering College

Dr. Kailash Pyakurel T.U.

Dr. Narendra Man Shakya Institute of Engineering

Mr. Som Nath Poudel CTEVT

Private/others

Dr. A. Karki CMS Development Consultants

Mr. Bhola Shrestha Energy System Bansbari

Mr. Chandra Mani Adhikari Allied Law Services

Mr. Chandra Mani Satyal Indrawati III Hydro Electric

Page 93: Constructive Dialogues on Dams and Developments in Nepal

A N N E X E S84

ANNEX 3 (B)

CONSULTATION MEETING WITH NGOS

JULY 18, 2003

NWCF, PATANDHOKA

Name of Participant Organisation

Ms. Kalpana Rajthala NFIWUAN, Bhaktapur

Mr. Padam Prasad Aryal NFIWUAN

Mr. Dhaka Ram Kunwar NFIWUAN

Mr. Ramhari Sharma NFIWUAN, Kathmandu

Mr. Shriram Acharaya NFIWUAN, Kathmandu

Mr. Krishna Bahadur Gurung Jal Sarokar Samuha, Nawalparasi

Mr. Krishna Adhikari Jal Sarokar Samuha, Rautahat

Mr. Krishna Paudel Jal Sarokar Samuha, Rupandehi

Mr. Guna Raj Panta Jal Sarokar Samuha, Kanchanpur

Ms. Laxmi Paudel Nepal Water for Health

Mr. Deepak Dewan TEWA

Ms. Rita Thapa Nagarik Aawaz

Ms. Sabina Khadka WATCH

Mr. Raju Khadka Nepal Water for Health

Mr. Ram Risal Rural Self-reliant Development Centre

Dr. Durga Paudel Rural Self-reliant Development Centre

Ms. Kabita Rai Independent Researcher

Page 94: Constructive Dialogues on Dams and Developments in Nepal

A N N E X E S 85

ANNEX 3 (C)

CONSULTATION WITH GOVERNMENT OFFICIALS

14 NOVEMBER 2003

IUCN, BAKHUNDOL

Name of Participant Organisation

Mr. Binod Prasad Devkota Department of Forest

Dr. Umesh Parajuli Department of Irrigation

Dr. Khin Ni Ni Thein UNEP–DDP

Mr. Uma Kant Jha Water and Energy Commission Secretariat

Mr. Keshab Dhoj Adhikari Water and Energy Commission Secretariat

Mr Shyam Bajimaya Dept. of National Parks and Wildlife Conservation

Mr. Bikash Chandra Shrestha Directorate of Fishery Development

Mr. Khruschev Shrestha DSCWM/BIWMP

Mr Shiv Kumar Basnet Ministry of Water Resources

Mr. Mohan Shakya Nepal Electricity Authority

Mr. Damodar Bhattarai Department of Water Induced Disaster Prevention

Mr. Shiva Chandra Jha Nepal Electricity Authority

Ms. Meera Joshi Ministry of Population and Environment

Mr. D. B. Singh Department of Electricity Development

Mr. Sohan Sundar Shrestha DoLIDAR

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ANNEX 4

STATUS OF DEFINING ISSUES

In the following section we list out the SPs, guidelines and defining issues. How relevant

is each defining issue to Nepal in indicated by an asterix against each and also suggests

a framework for adaptation, which is explained in the following table. As mentioned in

main text the team members disagreed on the many defining issues. We record specific

differences in the note below each guideline section.

Indicator Relevance Suggestion for adaptation

* High Addressed already addressed by Nepali legalprovisions (The Constitution, Muluki Ain, Acts andRegulations)

** Significant to be looked in the short (5-10 years) term (Thoseissues also addressed by Policies, National EIAguideline and DoED manuals are placed in this group)

*** Marginal to be looked in the long (10-20 years) term

**** High Though not mentioned in the legal provisions theactivities is practiced

Strategic priority 1

Gain public acceptance

Advisory Guideline

1.1 Analyse stakeholder

Defining issues

1.1.1 Recognise existing rights*

1.1.2 Identify those vulnerable/at risks**1.1.3 Identify constraints for stakeholder involvement**

Advisory Guideline

1.2 Negotiate on decision-making processes

Defining issues

1.2.1 Ensure stakeholder representation*

1.2.2 Ensure integrity of community processes**1.2.3 Provide adequate time for assessment/consultation participation*

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1.2.4 Make special provisions for prior informed consent*

1.2.5 Address power imbalances**

1.2.6 Ensure transparency*

1.2.7 Assist in negotiation**

Note: There were differences about defining issue 1.2.3. Some members argued that the 15 days time,

provided by existing legal provisions, for submitting concerned people’s opinion with regard to possible

impacts of implementation of the project is inadequate. Others, however, felt that it was adequate.

Advisory Guideline

1.3 Get free, prior and informed consent

Defining issues

1.3.1 Ensure broad representation/inclusiveness**

1.3.2 Establish an independent dispute resolution mechanism*

Note: Referring to defining issue 1.3.2, some members suggested that independent dispute resolution

mechanism would be relevant only for hydro projects with capacity higher than 50 MW while others

opined that it should be established in all projects irrespective of size.

Strategic priority 2

Conduct comprehensive options assessment

Advisory Guideline

2.1 Conduct SIA for environmental/ social/ health and cultural heritage issues

Defining issues

2.1.1 Recognise rights/assess risks of stakeholder*2.1.2 Incorporate environmental and social criteria*

2.1.3 Screen projects**

2.1.4 Reduce up-front planning & preparation cost**

2.1.5 Provide options of improving the performance of existing dams andother assets***

Note: Some members felt that (defining issue 2.1.4) would be applicable only to Independent Power

Producers (IPPs) while others suggested that it should be applicable to both the state and IPPs. Views

also differed on defining issue 2.1.5.

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Advisory Guideline

2.2 Conduct project level impact assessment for environmental, social, health

and cultural heritage issues

Defining issues

2.2.1 Subject project to two-staged Impact Assessment (IA), i.e., scoping

and assessment phases*

2.2.2 Allow for total integration of technical, environmental andsocial studies in the design stage.*

2.2.3 Honour the independence of project financing and developing

institution***2.2.4 Comply international professional standards for EIA, SIA, HIA

and CHIA*

2.2.5 Appoint independent panel of experts to assist the governmentand developer.*

2.2.6 Open local liaison office****

2.2.7 Make agreement to implement the mitigation measures.*2.2.8 Arrange for institutional and financial support for auditing and

monitoring.*

2.2.9 Put a redress procedure for addressing the resettlement plan**2.2.10 Publicise IAs*

Note: Since international financing institutions on the basis of bilateral and multilateral agreements

finance most hydro projects, some members felt that defining issue 2.2.3 will be relevant in Nepal. But

others disagreed. Similarly, members had opposite views about defining issues 2.2.4 and 2.2.5. DI 2.2.6

is practiced in Kali Gandaki ‘A’ hydropower project.

Advisory Guideline

2.3 Conduct multi-criteria analysis

Defining issues

2.3.1 Prepare ToR**

2.3.2 Conduct stakeholder analysis**

2.3.3 Establish information centre*2.3.4 Form stakeholder forum **

2.3.5 Form multidisciplinary planning team**

2.3.6 Prepare options inventory****

2.3.7 Screen options****

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2.3.8 Present options to stakeholder forum**

2.3.9 Conduct public hearing*

2.3.10Select the suitable option****

Note: There was no consensus on defining issues 2.3.4 and 2.3.8. Some opined that stakeholder forum

would be necessary to give voice to the affected people while others mentioned that such a forum would

unnecessarily prolong the period of implementation. DIs 2.3.6, 2.3.7 and 2.3.10 were particed during

Ranking and Screening Study bu NEA. DoED has formulated a screenign procedure and one such

approach was also used to select irrigation porjects in the mid west.

Advisory Guideline

2.4 Conduct Life-Cycle assessment

Defining issues

2.4.1 Categorise different stages for each options***2.4.2 Identify material flows and resource impacts at each stage***2.4.3 Compare each option with a set of indicators (efficiency,

emissions etc.). ***2.4.4 Identify the range and magnitude of subsidies/external factors/

incentives***

Note: Some members suggested the defining issues would be appropriate only to storage projects

having more than 500 MW capacity but others felt that they would be relevant in all projects.

Advisory Guideline

2.5 Assess greenhouse gas emissions

Defining issues

2.5.1 Assess CO2, CH4, and nitrogen cycles (N2O)***

2.5.2 Estimate future carbon input***2.5.3 Assess the characteristics (size, temperature, bathymetry, primary

productivity etc) of reservoir (s), inundated area(s)***

2.5.4 Estimate the cumulative emissions.***

Advisory Guideline

2.6 Conduct distributional analysis of projects

Defining issues

2.6.1 Assess equity/poverty.**

2.6.2 Conduct macroeconomic/regional analysis***

2.6.3 Conduct economic distributional analysis***

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Note: Some members felt that since defining issues 2.6.1 to 2.6.3 are dealt at the plan/policy levels, they

are irrelevant at project level. Other argued that the issues should be considered also at a project level.

Advisory Guideline

2.7 Conduct valuation of social and environmental impacts

Defining issues

2.7.1 Identify/select impacts to be valued*2.7.2 Conduct valuation studies*2.7.3 Conduct public hearings*

Advisory Guideline

2.8 Improve economic risks assessment

Defining issues

General approach

2.8.1 Include risks assessment in all steps of the planning cycle**2.8.2 Identify/Select risk as a part of larger stakeholder/multi-criteria

processes**2.8.3 Include ranges for the risk and sensitivity analysis on the basis of

past performance of large dams.***

2.8.4 Complement sensitivity analysis with full probabilistic riskanalysis***

At all stages

2.8.5 Improve prediction of project costs**

At options assessment stage

2.8.6 Conduct simple sensitivity analysis***

2.8.7 Compare the options qualitatively with uncertainty associated with

the cost and benefit**

At the feasibility stage

2.8.8 Conduct full probabilistic risk analysis of economic profitability**

2.8.9 Prepare modelling of changes in hydrological estimates (climate

change etc.)***

2.8.10 Investigate the likely benefits of risk reduction measures**

Note: Some members suggested that defining issues 2.8.2 to 2.8.5 will be necessary only for large

storage projects or those that export electricity. There were also differences on relevance of defining

issues 2.8.6, 2.8.7 and 2.8.9. Other members felt otherwise.

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Strategic priority 3

Address existing dams

Advisory Guideline

3.1 Ensure operating rules to reflect social / environmental concern

Defining issues

3.1.1 Ensure emergency warning /evacuation plans****3.1.2 Maintain downstream drinking water/environmental

requirements**

3.1.3 Ensure good quality of water to downstream during reservoirfilling**

3.1.4 Adopt compensation plan*

3.1.5 Release environmental flow*3.1.6 Release minimum technical flow**3.1.7 Release maximum ramp rates for downstream***

3.1.8 Ensure water allocations during normal operation**3.1.9 Manage operation during normal/exceptional floods***3.1.10Warn people for potential dangers****

3.1.11 Formulate rules for evacuation of people and animals**3.1.12 Set out rule for opening spillway gates**3.1.13 Conduct periodic safety inspection**

3.1.14Formulate drawdown procedure if dam safety is in doubt**

3.1.15Monitor relevant operation data**3.1.16Disseminate data to stakeholders**

3.1.17Review operating rule periodically***

Note: Some of the team members expressed reservation on the defining issue 3.1.16. They felt that this

provision could create unnecessary problems. But others argued that the information flow would help

address stakeholders’ concerns. DIs 3.1.1 and 3.1.10 are practiced in Kali Gandaki ‘A’ hydropower project.

Advisory Guideline

3.2 Improve reservoir operations

Defining issues

3.2.1 Collect views on current reservoir operation with stakeholder. **

3.2.2 Record /Confirm changes in the priority of water uses**

3.2.3 Optimize reservoir operation****

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3.2.4 Asses the ability to operate the reservoir optimally**

3.2.5 Develop basin-level decision support systems to optimize

interactive reservoir operation***

3.2.6 Provide clear procedure for emergency warning.**

3.2.7 Provide operator training for extreme events.**

3.2.8 Ensure monitoring systems are in condition*

3.2.9 Monitor sediment in the reservoir quantitatively/qualitatively**3.2.10 Minimize sediment deposition****3.2.11 Remove accumulated deposits***

3.2.12 Launch catchments management program****

Note: Differences emerged on defining issues 3.2.1 and 3.2.2 NEA operates the Kulekhani Reservoir

by optimising the system’s load. Catchment management activities are implemented

in Kulekhani (3.2.10 and 3.2.12)

Strategic priority 4

Provide sustaining rivers/livelihood program

Advisory Guideline

4.1 Conduct baseline ecosystem surveys

Defining issues

4.1.1 Study life cycle of fish species (especially migratory species)**4.1.2 Identify the distribution of habitat for endangered species*

4.1.3 Locate important areas for biodiversity*

4.1.4 Identify the key natural resources for riverine communities*

Advosory Guideline

4.2 Assess environmental flow

Defining issues

4.2.1 Assess the affected river upstream/downstream **

4.2.2 Identify ecosystem components*

4.2.3 Develop predictive capacity on biophysical responses **

4.2.4 Predict social impacts of biophysical responses*4.2.5 Create scenarios (with varying social, biophysical and economic

parameters)**

4.2.6 Select/Implement one scenario**

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Advisory Guideline

4.3 Maintain productive fisheries

Defining issues

4.3.1 Propose sound fish pass design**

4.3.2 Prevent the loss of endangered fish biodiversity**

4.3.3 Maintain fish stock**

4.3.4 Ensure long term sustainability**4.3.5 Produce fish for local consumption/export**

Strategic priority 5

Recognise Entitlements/Sharing Benefits

Advisory Guideline

5.1 Construct baseline social conditions

Defining issues

5.1.1 Assess baseline social conditions for all impact areas/communities*5.1.2 Ensure the base line social information.*

Advisory Guideline

5.2 Impoverish risk analysis

Defining issues

5.2.1 Prevent/Overcome the pattern of impoverishment***

5.2.2 Identify risk in advance explicitly**5.2.3 Make transparent the risk in advance**

5.2.4 Implement impoverishment risk model**

Note: There was difference of opinion on defining issue 5.2.4.

Advisory Guideline

5.3 Implement Mitigation, Resettlement/ Development Action Plan (MRDAP)

Defining issues

At government and developer level

5.3.1 Ensure MRDAP as a part of the master contract**

5.3.2 Ensure the signing of performance bond**

5.3.3 Provide other services (land acquisition, road building and

health care)**

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At community and affected persons level

5.3.4 Ensure compensation, resettlement and development

entitlements*

5.3.5 Make schedule of entitlement delivery*

5.3.6 Finalize institutional arrangement for delivering commitments**

5.3.7 Enlist obligation/responsibilities of the concerned parties (as

stipulated in contract)**5.3.8 Prepare recourse procedures**

Note: Some members argued that defining issue 5.3.1 is not relevant. They also thought that 5.3.3

would create incentive among the affected to inflate demands. Others strongly disagreed.

Advisory Guideline

5.4 Develop project benefit-sharing mechanism

Defining issues

5.4.1 List out/Identify the types of project benefit*

5.4.2 Assess the benefits*5.4.3 Ensure delivery of project benefit*

Strategic priority 6

Ensure Compliance

Advisory Guideline

6.1 Finalize compliance plan

Defining issues

6.1.1 Ensure compliance plan to follow the applicable laws*

6.1.2 Conduct independent review of internal processes/

commitments**6.1.3 Ensure sufficient in-country institutional capacity**

6.1.4 Ensure funds to secure performance*

6.1.5 Built compliance cost into the plan/project budget/evaluationprocess**

6.1.6 Establish performance indicators/ benchmarks*

Note: Differences emerged on defining issues 6.1.4 and 6.1.5.

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Advisory Guideline

6.2 Establish independent review panel (IRP) for social/environmental matters

Defining issues

6.2.1 Establish project level IRPs*

6.2.2 Fund IRPs**

6.2.3 Ensure reporting of IRPs to the national government/regulator*

6.2.4 Ensure systematic information distribution to IRPs (by thedeveloper)****

6.2.5 Make all report public*

6.2.6 Ensure developers responses to the issues raised (by IRPs)**6.2.7 Make frequency of IRPs visits flexible**

Note: Some members opined that defining issue 6.2.1 is relevant but others disagreed.

Defining issue 6.2.7 would be relevant only if the Independent Review Panel is entrusted

with monitoring performance. But views differed. Some members of the scoping team

argued that MoPE provides information to IRP.

Guideline

6.3 Ensure submission of performance bond

Defining issues

6.3.1 Apply the bond in related activities**

6.3.2 Make regular review of the level of security**

Note: Some members were convinced that the defining issues 6.3.1 and 6.3.2 were not relevant.

Advisory Guideline

6.4 Establish trust fund

Defining issues

6.4.1 Formulate laws for the trust fund**

6.4.2 Prepare transparent trust deed**

6.4.3 Appoint independent trustee **

6.4.4 Define the role of the affected people**

Note: There were differing views on defining issue 6.4.4.

Advisory Guideline

6.5 Apply integrity pact

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Defining issues

6.5.1 Ensure the compliance of pact with accepted international

practices***

6.5.2 Make provision for institutional capacity building (training,

technical assistance etc.)**

Note: Different views were expressed about defining issues 6.5.1 and 6.5.2.

Strategic priority 7

Share river for peace / development /security

Advisory Guideline

7.1 Develop procedure for shared rivers

Defining issues

Prior notification

7.1.1 Ensure prior notification7.1.2 Identify the relevant riparian issues7.1.3 Agree on modalities to share technical data/information

7.1.4 Ensure accurate impact evaluation of potentially affectedriparian states

Basin-wide impact assessment

7.1.5 Include a participatory basin-wide scoping phase7.1.6 Consider/honour the submissions of riparian states/affected

communities

7.1.7 Allow for acceptable independent panel review

Dispute resolution

7.1.8 Resolve dispute within six months through good faith negotiation

7.1.9 Refer the dispute to a fact-finding commission (as detailed in

UN Convention)

Note: The guidelines and defining issues covered by SP seven were not evaluated. The study team

members felt that the SP is biased against upper riparian as explain in the main text.

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ANNEX-5

COMPARISON OF ASIAN DEVELOPMENT BANK (ADB)AND THE WORLD BANK (WB) POLICIES ON WATER

RELATED ISSUES

World Bank (WB)

Operational Plan 4.02: Environmental

Action Plans (EAP)

� Encourages and supports to prepare

and implement an appropriate EAP

and to revise it periodically.

� Encourages the government to make

EAP drafts available to groups that will

be affected by its implementation and

to other interested groups including

NGOs.

Procedure 4.01 and Operational Plan

4.01: Environmental Assessment (EA)

� Requires to record earlier on the key

environmental issues (including any

resettlement, indigenous peoples, and

cultural property concerns).

� Evaluates a project’s potential

environmental risks, impacts and

examines project alternatives.

� Considers natural, economic, financial,

institutional, technical and social

aspects in an integrated way.

� Favours the project to include

components to strengthen EA-related

capacity.

� Ensures that the borrower consults

project-affects groups and local NGOs

and takes their views into account.

� Ensures the availability of relevant

material in a timely manner prior to

consultation in a local language.

Asian Development Bank (ADB)

Environment Policy:

� The IEE and EIA processes

need to involve key stakeholders.

� Strong and effective institutions are

necessary for good governance, but

they must also operate within the

principles of accountability,

transparency, participation and

predictability.

� Integrate environmental

consideration into all operations

from the earliest stage, moving

toward a more strategic and

comprehensive approach.

� Strengthen implementation of

environmental mitigation measures

in projects by clear specification and

support from local stakeholders.

� Environmental provisions are

reflected in contract, procurement,

and tender documents.

� The summary IEE/EIA reports are

required to be circulated worldwide.

� ADB help/assist (including resources

need) to mitigate unanticipated

environmental impacts during project

implementation or after project

completion.

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Energy Policy:

Among the four operational

priorities, two are specific to the

environmental and regional

cooperation

1. Supports measures to address

acid rain problems, use of clean

energy and Kyoto Protocol

mechanisms for GHG abatement,

and by financing renewable energy

projects; and

2. Promotes regional cooperation: by

helping developing member

country identify and implement

export-oriented hydropower and

natural gas-based generation and

transmission project.

For new hydropower projects, the

approach recommended by the

World Commission on Dam will be

pursued.

Water Policy:

ADB’s water policy has the seven

principle elements. They are: (1)

Promote a national focus on water

sector reform, (2) Foster the

integrated management of water

resources, (3) Improve and expand

the delivery of water services, (4)

Foster the conservation of water

and increase system efficiencies,

(5) Promote regional cooperation

and increase the mutually

beneficial use of shared water

resources within and between

countries, (6) Facilitate the

exchange of water sector

Trust funds may be available to potential

borrowers that request Bank assistance

in financing.

Operational Directives 4.20: Indigenous

Peoples (IP)

The Bank’s broad objective towards IP is

to ensure that the development process

fosters full respect for their dignity,

human rights, and cultural uniqueness.

Additionally, the bank;

� Ensures that IP receive culturally

compatible social and economic

benefits.

� Requires to deal the issues pertaining to

IP must be based on the informed

participation.

� Ensures the rights of IP to have access

to natural resources vital to their

subsistence.

� Ensures participation by IP in decision-

making throughout project cycle.

OP 4.07: Water Resources Management

� Entails support for providing potable

water, sanitation facilities, flood control

and water for productive activities in a

matter that is economically viable,

environmentally sustainable and

socially equitable.

� Assists in the following priority area: (a)

developing a comprehensive framework

for designing water resource

investments, policies, and institutions

through river basin perspectives, (b)

adopting pricing and incentive policies

that achieve cost recovery, water

conservation, and better allocation of

water resources, (c) involving users

and stakeholders in planning and

World Bank (WB)Asian Development Bank (ADB)

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managing water projects and in policy

formulation. (d) Restoring and

preserving aquatic ecosystem and

guarding against overexploitation of

groundwater resources, and (e)

establishing strong legal and

regulatory frameworks to ensure that

social concerns are met,

environmental resources are

protected.

Procedure 4.04: Natural Habitats

The Bank identifies relevant natural

habitat issues for regional and

sectoral EA reports which indicate the

present location of natural habitats in

the region or sectoral involved, analyse

the ecological functions and relative

importance of such natural habitats,

and describe the associated

management issues.

Operational Procedure 4.11: Cultural

Property

� Assists in preservation of cultural

property.

� Declines to finance projects that will

significantly damage non-replicable

cultural property.

� Assists in the protection and

enhancement of cultural properties.

Procedure 7.50 and Operational

Procedure 7.50: Projects on

International Waterways

� Potential international water rights

issue is assessed early on.

� recognizes of riparian cooperation for

the efficient use and protection of the

waterway.

information and experience, and (7)

Improve governance.

ADB adopts a cautious approach

to large water resource projects-

particularly those involving dams

and storage-given the record of

environmental and social hazards

associated with such projects. All

such projects will need to be

justified in the public interest and

all government and non-

government stakeholders in the

country must agree on the

justification.

Policy on Indigenous People:

The policy ensures the ADB

interventions affecting indigenous

people are to be (1) consistent with

the needs and aspirations of

affected indigenous people, (2)

compatible in substance and

structure with affected indigenous

peoples’ culture and social and

economic institutions, (3)

conceived, planned, and

implemented with the informed

participation of affected

communities, (4) equitable in

terms of development efforts and

impact; and (5) not imposing the

negative effects of development on

indigenous peoples without

appropriate and acceptable

compensation.

World Bank (WB)Asian Development Bank (ADB)

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� in cases where differences remain

unresolved between the states

proposing the project (beneficiary state)

and the other riparian, the Bank normally

urges the beneficiary state to reach

appropriate agreements with the other

riparian.

� the beneficiary state should formally

notify the other riparian of the proposed

project. If the borrower indicated to the

bank that it doesn’t wish to do so,

normally the Bank itself does so. If the

beneficiary state objects to the Bank

doing it, the Bank discontinues

processing of the project.

� if the other riparian raise objections to

the proposed project, the Bank may

appoint one or more independent

experts to examine the issues.

OP 4.37 Safety of Dams

For small dams, generic dam safety

measures designed by qualified

engineers are usually adequate. For

large dams, the Bank requires: (a)

reviews by an independent panel of

experts of the investigation, design, and

construction of the dam, (b) a plan for

construction supervision and quality

assurance, an operation and

maintenance plan, and an emergency

preparedness plan, and (c) periodic

safety inspections of the dam after

completion.

World Bank (WB)Asian Development Bank (ADB)

Inspection Policy:

The inspection policy of the ADB

establishes a formal channel

through which local communities,

organizations and other groups-

and, in special circumstances,

members of the Bank’s Board of

Directors-can request independent

review or “inspection” of the Bank’s

role in certain Bank-financed

projects.

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ANNEX 6 (A)

NEA COMMENTS ON SCOPING STUDY REPORT

(DRAFT – APRIL 2004)

GENERAL COMMENTSWCD report prepared in 2000 marks a major chapter in the history of water resources

development. The guidelines prepared with the objective of sustainable development

through a negotiated approach is certain to make long term impact on nations particularly

the ones where the resource is yet to be harnessed.

Given unique nature of Nepal’s resource base with Hydropower having a share of

more than 80% of the energy potential, there is a strong need to effectively utilize this

renewable energy resource. Based on the resource endowment and hydrological

characteristics of Nepal, the need for dams for socio economic development should be

acknowledged by all. Dams are hence not a luxury but a necessity for meeting the needs of

Nepalese people and achieving overall growth. The major concern is to thus to make the

dam based project sustainable through social equity and benefit sharing mechanism.

The existing Acts and regulations in the field of water resources & environment

address much of the issues that have been raised by the WCD report. The core values of

WCD are universally accepted and hence serve as a planning tool. However, much of

the 26 guidelines prepared by WCD are too impractical and can not be implemented as

such. Hence WCD report shall not be a binding document for planning & policy

implementation. The fundamental issue for preparing a good guideline is to create a

conducive environment for the implementation of dam based projects that would benefit

the people at large.

In the past decade, there has been major development in the field of hydropower

and environmental concerns. In case of Kali Gandaki A, EIA study was carried out

parallel to the project studies which recommended appropriate mitigation plan as well.

Mitigation measures were carried out and environmental monitoring was conducted

during project construction. Recently, the environmental post audit was also completed

which has been well accepted by the project donors. All the stakeholders should

review the difficulties faced by project developers regarding implementation of

environmental mitigation programs as well.

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Option assessment should be country specific based on the resource endowment

of the country (like hydropower based generation expansion plan in the Nepalese

context). Moreover, option assessment should be concluded at certain stage in order

to implement the program.

It is to be emphasized that Nepal has already adopted several guidelines that

suits it’s requirement and in this regard the some provisions of WCD guideline that

fulfill the national interest need to used as well.

In this context, some of the issues to be addressed as presented in the draft

report have misleading statements like – myth of overall development, lack of

professionalism in preparing EIA document, mitigation budget is ad hoc, affected people’s

cannot voice their concerns in public consultations etc.

As mentioned above, Kali Gandaki A may be considered as a reference case for

comparing the pre and post project development scenario where the national guidelines

have been met and well accepted by the donors.

OTHER COMMENTS

Gaining Public AcceptanceWCD guideline states that indigenous people have the right to decide whether to build

the project or not. As water is a national resource, such a pre-condition of having

consensus of all indigenous groups is not achievable and hence such provisions of

WCD simply prevents the development.

The draft report mentions “actual beneficiaries at community level and project

affected families do not get included in the process” (page 13). This is a grossly incorrect

statement and undermines the endeavor of the project developers. Likewise text like

“value laden one way information flow (myth of development)’’ is a prejudice observed

in the draft report. Compensation and rehabilitation, employment in the project

construction, rural electrification, access road that is vital for rural growth, 10% of

royalty to the district etc. are some of the major benefits brought about by the project

development. Recently the local governance act (January 2004) has increased the

royalty amount to 50%. It should also be noted that project beneficiaries are not only

local people but the nation itself. The broader public acceptance like project contribution

in meeting the growing power demand through renewable energy supply and its forward

linkages with the macro economy should also be accounted while making a statement

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on public acceptance. Hence the text should be modified to give a perspective of socio

economic transformation that the project has brought about in totality.

Obviously, human needs are unlimited and there are segment of society, which

think that all their needs should be fulfilled by project. Such utopian thinking will only

hamper future project development.

Conduct comprehensive option assessmentText like “provisions of EIA are taken as burden (page 15)” and “methods of impact

assessment and prediction embroyonic (page 15)” are subjective interpretations made

in the draft report. The statement “technical design keeps on changing during

optimization and earlier issues do not remain relevant” is not correct as the impact

assessment is focused on the whole scheme and can accommodate design changes

during construction without any major impact. Likewise, “alternative selection is not

practiced systematically in Nepal” (page 16) does not show the correct picture. Project

identification is based on the outcome of inventory study and within each project,

alternative layout is prepared in-order to recommend the most promising one from

technical, economic and environmental point of view as there is no need to compare

all the time with other alternatives like thermal or nuclear in the context of Nepal.

“Affected people’s cannot voice their concerns in public consultative meeting (page

16)”. This statement is vindicated by the active participation of people in the public

hearing and during the EIA surveys.

In the same page the subtitle “Green house gas emission” should also include the

credit to be given for hydropower project – particularly for storage project for avoiding

the pollutants by displacing thermal generation.

The text “the use of biogas is gaining popularity and solar panel are being promoted

to supply electricity “(page 41) should add the suffix “in isolated communities through

subsidy from line agencies” to make it meaningful.

The text mentioned in this section should also highlight the need for meeting

daily, seasonal load in an efficient manner in the integrated power system. There is

large seasonal variation in river discharge and the peak load demand is in dry season.

Comparison of project development alternative should be made on its ability to deliver

dependable (or firm) power and not merely on the cost per unit of electricity.

Option assessment needs to be carried out during planning, feasibility study stage

but after the feasibility study stage the project parameters are basically fixed. Hence

option study cannot be carried out indefinitely or else the project implementation will

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be jeopardized. There is hence a need to highlight the shortcoming of WCD guideline

with respect to the option assessment.

Addressing existing damsThe definition of high dam as adopted by the WCD report (>15 m high from foundation

or 3 million cumecs storage volume) is not applicable for Nepal where the river gradient

is high and even modest run of river schemes have a foundation depth in that range.

Although dams of 15 m height can have large impact if it is located in plains, in case of

hilly topography it has minimum impact. Hence the Nepal Dams and Development

report should categorically emphasize the need for suitable modification to the

terminology of high dam to suit Nepal’s requirement.

The draft mentions in page 18 “There are cases where the affected people

complained that they did not get adequate compensation”. It would be appropriate

also to add that the affected people in the recent projects have been well compensated

for their land, houses etc. and projects both public and private have been facing never

ending demands of the local population.

Text “so far sediment has not been flushed in Kulekhani” (page 18) shows confusion

on the pertinent issue. Sediment flushing is not feasible and hence not planned in the

KL-1 project having rockfill dam and hence such statements should be deleted.

Statements like “IHA guidelines are theoretical and focus on dams for development

while WCD guideline are elaborate and go to the extent of suggesting procedure” (page

38) shows prejudice against other guidelines that have been prepared by the people working

in this field. IHA guideline has been adopted by the 82 member countries as an important

policy document for the 21st century and is more pertinent in the context of Nepal.

Sustaining rivers and livelihood (page 19)River ecosystem is an intricate phenomenon involving complex issues far beyond the scope

of dam development as well. Hence it can be studied to certain extent only for large sized

projects in the major river basins. The guideline needs to be realistic regarding the extent

to which a hydropower project developer can invest in the project studies.

Recognizing entitlements and sharing benefits (page 20)Statement “lacks comprehensiveness for large project” and “resettlement action plans

does not exist” are incorrect. Baseline studies are carried out as part of EIA process.

Rehabilitation plans have been implemented even prior to project construction in

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the recent project Middle Marshyangdi where the number of displaced families is

more than 25.

Ensuring compliance (Page 23)Ensuring compliance with adopted EIA & mitigation plan should not lead to

“mothballing’’ of hydropower schemes or having moratorium on new construction as

conceived in the WCD guideline. As hydropower is the only renewable source of energy

that is endowed with the country, such a measure would be fatal and hence the draft

report shall include Nepal’s objection to it.

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ANNEX 6 (B)

COMMENTS BY WATER AND ENERGY USERS’ FEDERATION,NEPAL ON THE SCOPING STUDY REPORT OF

DAMS AND DEVELOPMENT IN NEPAL

We would like to express our sincere thanks to Sameer Karki for his hard work in

coordinating the dialogue on Dams and Development. IUCN also deserves our

appreciation for initiating and continuing this process.

Water and Energy Users’ Federation, Nepal (WAFED) takes this opportunity to

record a few comments on matters that should have been covered by the scoping study

report but failed to find inclusion in it.

1. We consider this dialogue process among dam proponents, operators, NGOs

and affected people a positive and constructive initiative. The process has also

been praised internationally. We firmly believe that such a dialogue can help

overcome differences and make decision-making more inclusive.

2. We had agreed to include the case studies of Kali Gandaki A, Khimti and

Indrawati Hydroelectric Projects and include the insights (positive and negative

impacts created by these projects at local level) in the report. But the findings

have been grossly diluted. These insights would have given space to the voice

of the affected people, towards which concerned authorities are less sensitive.

These local concerns addressed honestly are the key to designing ‘good dams’

in Nepal and implementing them successfully.

3. The right and authority to evaluate the success or failure of projects rests with

the affected people. In Nepal, donors’ and their consultants’ reports are used as

the criteria. This is unacceptable, as such reports would have inherent biases of

project promoters.

4. Complaints against Kali Gandaki ‘A’ have been filed in Asian Development Bank.

The situations in Khimti and Indrawati are serious too. Some problems have

emerged because of shortcomings of existing policies, laws and institutional

dysfunction. Others have emerged due to careless implementation. However,

government officials insist that there are no mistakes committed in the past.

They express reservations about the recommendations of WCD report. That

“failed development” promoted by government and donors in Nepal has brought

the country to such an impasse seems to be lost on them.

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5. NGOs and affected people have contributed to making the dialogue among

various stakeholders about dam building constructive. Government agencies

consider their genuine and valid concern as impediments to progress, an

attitude which does not help build consensus or confidence in the official

apparatus.

6. Dialogue should help us appreciate each other’s perspectives. The government

should help foster such a platform for dialogue.

Finally, we suggest that the government create an enabling environment for

constructive dialogue on dams and development following the WCD’s guidelines (as

has begun with this current process) so that ‘good dams’ can be built and bad dams

and mistakes of the past avoided.

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IUCN– The World Conservation Union

IUCN - The World Conservation Union was founded in 1948. It brings together States, government agencies

and a diverse range of non-governmental organizations in a unique world partnership: over 1,035 members

in all, spread across some 141 countries. The World Conservation Union builds on strengths of its members,

networks and partners to enhance their capacity and to support global alliances to safeguard natural resources

at local, regional and global levels.

As a Union, IUCN seeks to influence, encourage and assist societies throughout the world to

conserve the integrity and diversity of nature and to ensure that any use of natural resources is equitable and

ecologically sustainable.

IUCN - The World Conservation Union officially launched the Nepal Country Office on 23 February

1995 with the Ministry of Finance, His Majesty’s Government as the government partner. IUCN Nepal has

been developing partnerships with various government line agencies as well as non-governmental

organizations to carry forward its activities to conserve Nepal’s natural resources and ecological processes.

Nepal Water Conservation Foundation

Nepal Water Conservation Foundation (NWCF)

NWCF is a non-governmental, non-profit and non-political organisation that conducts interdisciplinary

research on interrelated issues that affect the use and management of water and energy. NWCF aims to

promote the sustainable development, management and conservation of natural resources through

generating and disseminating scientific knowledge to be used in informed decision making. It promulgates

research findings through education and advocacy. Its specific focus is on capacity building, both of the

upcoming generation as well as of disadvantaged groups, so that resources can be used without

compromising the rights of either the future generation or non-human life. By building the capability of

younger generations of professionals to analyse issues related to sustainable development, NWCF maintains

a pool of interdisciplinary analytical expertise. NWCF publishes the interdisciplinary journal Water Nepal.

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